Tesla CEO Elon Musk explained the automaker’s strategy for building batteries from top to bottom in a domestic setting as the company continues to alleviate its reliance on Chinese materials, something other companies are too dependent on.

With the Trump Administration, it is no secret that the prioritization of U.S.-built products, including sourcing most of the materials from American companies, is at the forefront of its strategy.

The goal is to become less dependent on foreign products, which would, in theory, bolster the U.S. economy by creating more jobs and having less reliance on foreign markets, especially China, to manufacture the key parts of things like cars and tech.

In a note from Alexander Potter, an analyst for the firm Piper Sandler, Tesla’s strategy regarding batteries specifically is broken down.

Potter says Tesla is “the only car company that is trying to source batteries, at scale, without relying on China.”

He continues:

“Eventually, Tesla will be making its own cathode active materials, refining its own lithium, building its own anodes, coating its own electrodes, assembling its own cells, and selling its own cars; No other US company can make similar claims.”

Musk, who spent time within the Trump White House through his work with the Department of Government Efficiency (DOGE), said that Tesla is doing the “important” work of localizing supply chains as the risks that come with being too dependent on foreign entities could be detrimental to a company, especially one that utilizes many parts and supplies that are manufactured mostly in China.

It is important, albeit extremely hard work, to localize supply chains to mitigate geopolitical risk

— Elon Musk (@elonmusk) June 3, 2025

Tesla has done a lot of work to source and even manufacture its own batteries within the United States, a project that has been in progress for several years but will pay dividends in the end.

According to a 2023 Nikkei analysis, Tesla’s battery material suppliers were dominated by Chinese companies. At the time, a whopping 39 percent of the company’s cell materials came from Chinese companies.

This number is decreasing as it operates its own in-house cell and material production projects, like its lithium refinery in Texas.

It also wants to utilize battery manufacturers that have plans to build cells in the U.S.

Panasonic, for example, is building a facility in Kansas that will help Tesla utilize domestically-manufactured cells for its cars.

Tesla shares are up nearly 20 percent in the past month, but that is not stopping the only trillion-dollar automaker from attracting all types of new potential sectors to disrupt, at least from an investor and analyst perspective.

Morgan Stanley’s Adam Jonas is not one to shy away from some ideas that many investors would consider far-fetched. In a recent note, Jonas brought up some interesting discussion regarding Tesla’s potential in the eVTOL industry, and how he believes CEO Elon Musk’s answer was not convincing enough to put it off altogether.

Tesla’s Elon Musk says electric planes would be ‘fun problem to work on’

Musk said that Tesla was “stretched pretty thin” when a question regarding a plane being developed came up. Jonas said:

“In our opinion, that’s a decidedly different type of answer. Is Tesla an aviation/defense-tech company in auto/consumer clothing?”

Musk has been pretty clear about things that Tesla won’t do. Although he has not unequivocally denied aviation equipment, including planes and drones, as he has with things like motorcycles, it does not seem like something that is on Musk’s mind.

Instead, he has focused the vast majority of his time at Tesla on vehicle autonomy, AI, and robotics, things he sees as the future.

Tesla and China, Robotics, Pricing

Morgan Stanley’s note also discussed Tesla’s prowess in its various areas of expertise, how it will keep up with Chinese competitors, as there are several, and the race for affordable EVs in the country.

Tesla is the U.S.’s key to keeping up with China

“In our view, Tesla’s expertise in manufacturing, data collection, robotics/ physical AI, energy, supply chain, and infrastructure are more critical than ever before to put the US on an even footing with China in embodied AI,” Jonas writes.

It is no secret that Tesla is the leader in revolutionizing things. To generalize, the company has truly dipped its finger in all the various pies, but it is also looked at as a leader in tech, which is where Chinese companies truly have an advantage.

Robotics and the ‘Humanoid Olympics’

Jonas mentioned China’s recent showcasing of robots running half marathons and competing in combat sports as “gamification of robotic innovation.”

Tesla could be at the forefront of the effort to launch something similar, as the analyst predicts the U.S. version could be called “Humanoid Ninja Warrior.”

Pricing

Tesla is set to launch affordable models before the end of Q2, leaving this month for the company to release some details.

While the pricing of those models remains in limbo with the $7,500 tax credit likely disappearing at the end of 2024, companies in China have been able to tap incredibly aggressive pricing models. Jonas, for example, brings up the BYD Seagull, which is priced at just about $8,000.

Tesla can tap into an incredibly broader market if it can manage to bring pricing to even below $30,000, which is where many hope the affordable models end up.

During the Q3 2024 Earnings Call, Musk said that $30,000 is where it would be with the tax credit:

“Yeah. It will be like with incentive. So, 30K, which is kind of a key threshold.”

Tesla has recorded a dominating performance in the Norwegian market as the company outpaced other automakers for the month of May.

The company walked away with 19 percent of the total EV sales for the month, with a vast majority of those coming from the Model Y, which accounted for 2,344 of the 2,598 sales Tesla had for the month.

Tesla Model Y has become the most common vehicle in Norway

As a whole, Tesla outpaced Volkswagen by just over 300 units as the German company continues to have a tremendous year across Europe in terms of EVs.

For Tesla, however, it was a tremendous month, especially compared to past years, and as it continues to experience a reduction in sales in the European market, this was an outlier.

A Strong Month

Tesla’s performance in Norway in May was incredibly strong, including growth from the same month last year and quarter-over-quarter improvements.

Tesla sold just 830 units in Norway last May, meaning last month was a 213 percent increase compared to the same month last year.

🚨Tesla is dominating in Norway:

– It has 19.4% of the EV segment.
– Model Y was the best-selling vehicle in Norway in May.
– Best month for Tesla in 2024 in Norway
– 213% increase compared to May ’24

BOOM! https://t.co/X84yYNNXAb pic.twitter.com/8RWr4ukfHE

— TESLARATI (@Teslarati) June 2, 2025

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For the year so far, Tesla has sold 7,600 units in Norway, trailing only Volkswagen, which has had a very strong year in Europe thus far. VW holds 19.5 percent of the total market share for the year in terms of EVs; Tesla has 13.7 percent.

However, the Model Y is still the best-selling EV in the country, and it is not particularly close. With 6,201 sales, it leads the Toyota BZ4X and the Volkswagen ID.4, which have 3,703 and 3,073 sales, respectively.

Tesla has combated weak sales figures in Europe this year, some of which are due to the Model Y changeover across all of the company’s global production facilities. CEO Elon Musk has said that he does not believe demand is an issue for Tesla at all, but instead, Europe is just a weak market.

Figures via EU-EVs