General Motors and Tesla are accelerating efforts to strip China-made components from vehicles produced in the United States, reflecting deepening concerns across the automotive and semiconductor supply chain over rising geopolitical tensions and recurring disruptions in critical materials and chips.

On November 12, Reuters reported, citing four people familiar with the matter, that General Motors (GM) has directed several thousand suppliers to eliminate China-sourced parts from their supply chains. Executives have been telling suppliers to seek alternative sources of raw materials and components, with the long-term goal of shifting the company's supply chain entirely out of China. According to several sources, GM has set 2027 as the deadline for some suppliers to fully terminate China sourcing.

GM first raised the directive with certain suppliers in late 2024, but the urgency increased in early 2025 as the U.S.–China trade conflict escalated. Executives stressed that the initiative is part of a broader strategy to enhance supply-chain "resiliency," especially as repeated tariff swings, rare-earth bottlenecks, and semiconductor shortages continue to destabilize production planning.

Supply Chain Strain Intensifies as Geopolitical Risks Spread

The automotive sector has faced repeated disruptions throughout 2025. Although Washington and Beijing agreed in late October to roll back selected tariffs and export barriers, industry executives remain wary of volatile trade dynamics—particularly in a sector where product planning spans many years.

The disruptions have been severe:

 ● In April, China tightened export controls on components containing rare-earth elements, prompting automakers to race to secure inventories.

 ● In October, additional restrictions were imposed on more rare-earth shipments.

 ● Late last month, a dispute between Chinese and Dutch authorities over the ownership of chipmaker Nexperia temporarily halted exports of its low-cost automotive chips from China, triggering fresh warnings of potential factory shutdowns.

GM has already taken steps to diversify away from China in high-risk categories such as battery materials and semiconductors, partnering with U.S.-based rare-earth suppliers and investing in a lithium mine in Nevada. The latest move, however, broadens the scope to include basic components and materials used across North American production.

GM CEO Mary Barra said during the company's October earnings call that GM has been working "for a few years" to increase supply chain resilience, emphasizing efforts to source components in the same regions where vehicles are produced. GM's global purchasing chief Shilpan Amin added that the risks of supply disruptions have made it untenable to rely solely on the lowest-cost countries.

Tesla Joins the Shift, Accelerates Removal of China-Made Parts in U.S. Manufacturing

Just days after reports emerged regarding GM, the Wall Street Journal revealed that Tesla has begun replacing China-made components in vehicles produced in the United States, with a plan to eliminate all China-sourced parts from U.S.-built models within the next one to two years.

The move follows years of supply-chain turbulence triggered by the pandemic and intensifying geopolitical tensions. Tesla has reportedly encouraged Chinese suppliers to relocate production to Mexico or other regions serving its U.S. factories. The transition accelerated in April after the introduction of Washington's new "reciprocal tariffs" policy, which significantly raised duties on a wide range of China-made goods.

Meanwhile, Tesla's operations in China face growing pressure from both market competition and geopolitics. According to the China Passenger Car Association, Tesla sold 61,497 China-made EVs in October, down 9.9 percent year-on-year, reversing modest growth in September. Exports from the Shanghai Gigafactory—including shipments to Europe, India, and other markets—fell 32.3 percent compared with the previous month.

The recent freeze in Nexperia chip exports from China has also heightened internal discussions at Tesla over the need to further diversify semiconductor supply.

Notably, Tesla stated on May 6 that its China production is unaffected, emphasizing that over 95 percent of parts in every China-made Model 3 and Model Y come from domestic suppliers.

Rewiring Decades of China-Centric Supply Chains Will Take Years

Industry analysts and supplier executives warn that shifting away from China will be complex, costly, and slow. China's dominance in key automotive supply categories—such as lighting, electronics, tooling, and die-making—means that viable alternatives are limited.

"It's a massive effort. Suppliers are scrambling," said an executive at a major parts manufacturer.

Collin Shaw, head of the industry association MEMA, noted that China's commodity-parts ecosystem took 20 to 30 years to build, meaning efforts to unwind these dependencies within a few years are unrealistic.

Beyond GM and Tesla, other automakers are also taking precautionary measures. Stellantis earlier this year began reducing exposure to China to mitigate potential tariff risks.

A Structural Realignment of Global Automotive Supply Chains

The latest actions by GM and Tesla underscore a broader shift in the global automotive and semiconductor landscape: security, predictability, and geopolitical alignment now outweigh pure cost considerations.

As U.S.–China tensions persist, automakers are preparing for a long-term realignment that is reshaping sourcing strategies, impacting semiconductor demand patterns, and forcing suppliers worldwide to rethink production footprints.