What just happened? The US' ongoing trade war with China is finally having an impact on one of the most well-known electric vehicle makers out there, Tesla. The company has been forced to increase the prices of their Model S and Model X vehicles in China by 20 percent to compensate for recent US-China trade tariffs.
The US and China have been locked in a bitter trade war for several months now. In April, the US banned suppliers from selling parts to Chinese smartphone giant ZTE. Additionally, US officials reportedly pressured the likes of AT&T and Verizon into dropping Huawei and ZTE phones from their device line-ups.
As a result of all of these roadblocks, ZTE was forced to shut down their US-based operations temporarily. However, it isn't just Chinese companies that are feeling the effects of this trade war.
Indeed, Tesla has been forced to raise the prices of their all-electric Model S Sedan and their Model X SUV by a whopping 20 percent to make up for recently-implemented US-China trade tariffs.
20 percent may not seem like much at first, but due to the high cost of Tesla's vehicles, Chinese residents could easily be forced to pay anywhere from an additional $20,000 to $37,000 just to get their hands on one of the cars.
While these tariffs haven't stopped Tesla from operating in China, it's only a matter of time before the country's wannabe Tesla owners become fed up with the high prices. That could be a pretty substantial blow to Tesla's business, given the fact that they ship quite a few cars to Asian markets.
Only time will tell how Tesla decides to handle the situation moving forward, but it's possible they will be forced to accelerate their rumored plans to build local factories in China if the trade war doesn't end soon.