The trade war between the United States and China is battering Tesla's competitiveness, the U.S. electric auto maker said Tuesday.
In announcing its third-quarter vehicle production numbers, Tesla said it was able to "significantly increase" deliveries of its Model S and Model X vehicles "notwithstanding the headwinds we have been facing from the ongoing trade tensions between the US and China."
Elon Musk's electric vehicle company pointed out that China has put an import tariff of 40 percent on Tesla vehicles, compared with 15 percent for other vehicles imported to China.
Tesla said it costs 55 percent to 60 percent more to make its vehicles than "the exact same car" made by Chinese producers. The market in China is "by far the largest" in the world for electric vehicles, Tesla said.
Shares of Tesla closed down 3.1 percent in Tuesday at $301.02 a share.
The latest round of tariffs on U.S. and Chinese goods went into effect Sept. 24, with President Donald Trump's administration ordering tariffs of 10 percent on $200 billion worth of Chinese products and Chinese President Xi Jinping's government responding with duties on $60 billion in American goods.
It was Trump's third round of China-focused levies. The U.S. and China have already applied tariffs to $50 billion of each other's goods — moves that threaten to derail global supply chains.
Tesla said it is responding to the heightening tensions and increasing costs by "accelerating construction of our Shanghai factory," which the company announced in July. That announcement came days after Tesla said it was raising prices on its vehicles by 20 percent in China to respond to the first round of tariffs.
The Shanghai factory is "roughly" two years from producing vehicles and about five years from pumping out "around 500,000 vehicles per year," Tesla said.