If parts made in China are legal in the US, is something, Tesla has been researching. 
Additionally, according to sources, this might create a pathway for shipments to Canada. 
Model 3 cars and Model Y crossovers are produced at the Tesla factory in Shanghai.

Tesla is thinking about exporting made-in-China electric cars to the US, two people with knowledge of the planning told Reuters. This would be a turnabout that would reflect the automaker's growing cost advantage at its Shanghai plant and a slowing demand from Chinese consumers.

The individuals, who wished to remain unnamed because the matter is personal, claim that Tesla has been investigating whether components from its Chinese suppliers are in compliance with laws in North America. If they are, Tesla may ship China-made Model Y and Model 3 vehicles there for sale as early as next year. One of the individuals claimed that might also create a route for exports to Canada.

The Tesla Shanghai Gigafactory, which underwent an upgrade earlier this year, is now capable of producing 1.1 million electric vehicles yearly, making it the company's most productive manufacturing plant. Shanghai produces Model 3 sedans and Model Y crossovers for both internal use in China and export to places including Europe, Australia, and South East Asia.

If implemented, the strategy might make things more complicated for US buyers. The incentive offered for a specific vehicle could differ depending on whether it was imported, according to the rules of a new electric vehicle subsidy and production-reward package that US President Joe Biden signed into law.

Zachary Kirkhorn, the chief financial officer of Tesla, stated to investors last month that the manufacturer was 'extremely well-positioned to capture a big part' of the incentives provided under the IRA for EVs and batteries for energy storage. Tesla has up to now relied on its factories in Fremont, California, and Austin, Texas to produce the vehicles it sells in North America.

The Model S, Model Three, and Model X and Model Y crossovers are all made at Tesla's first factory in California. The Model Y and the future Tesla Cybertruck are made at the Texas facility, which started operating earlier this year. Additionally, Tesla is stepping up production at a facility it constructed earlier this year in Berlin. One of the individuals claimed that the output from the Berlin factory will lessen the requirement for some Chinese exports.

The price difference between Tesla vehicles sold in China and the US has also been growing, as a result of both increasing US prices and fresh discounts in China. Tesla reduced the starting pricing for the Model 3 and Model Y in China last month, slashing them by as much as 9%, despite CMBI analysts' predictions of an impending 'price war' in the country.

For customers who take delivery this month and get insurance from one of Tesla's partners, company provided an extra refund on Monday. While the Model Y costs $65,990 in the US, Tesla only charges $49,344 (about Rs. 30 lakh) in China (nearly Rs. 53 lakh). Light-duty trucks and cars made in China are subject to a 25% and 27.5 percent US tax, respectively.

The biggest auto market in the world, China, charges importers a 15 percent duty. Elon Musk, the CEO of Tesla, encouraged then-President Donald Trump to increase tariffs on Chinese automobile imports to the United States in order to create 'a fair outcome' where both sides had identical and 'equally modest' taxes in 2018, before Tesla's Shanghai facility had begun production.