Nobody can deny the prominent place of China in the world. Specifically, after President Xi, Jinping set an ambitious plan to make China the world’s future innovation and industrial center. He isn’t going to save any effort to achieve that goal, even if he had to make concessions.
But, what is Elon Musk and China’s relationship? Just to reach the “Silicon Valley Iron Man” partnership and put his hand with the giant electric vehicle, Mr. Xi changed the rulebook to allow the owners of auto ventures with non-Chinese companies.
Elon Musk and China’s relationship!
Tesla Inc. proved its worth as one of the best in the area of EV and sustainable energy. And China definitely knew that. In July 2018 Mr. Musk signed a deal to open an electric-vehicle factory in Shanghai. Chinese authorities gave generous offers to the company, from cheap land to low-interest loans and tax incentives. On the other hand, China knew in return that Tesla will create jobs, and the Chinese government will get $345 million in annual taxes that are expected to start generating at the end of 2023.
Tesla’s CEO always wanted to open a factory in the world’s largest auto market, but the problem was that he didn’t want to take on a Chinese partner. At a meeting in 2019, Beijing gave Mr. Musk a “Chinese green card.” As a Nice gesture, the billionaire let the premier take a Tesla in a tour a spin inside the Zhongnanhai leadership compound.
We can say that the sales of Tesla in China were pretty good. It helped to raise Tesla’s first full year of profitability in 2020 and in the first nine months of 2021.
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Changing in Chinese policy toward Tesla
But things have changed, and the business environment in China isn’t fluent anymore. The preferential treatment Ignited jealousy in domestic rivals. In addition to the criticism from drivers and Chinese officials on its vehicle quality. Since data security is a high priority in China, Tesla is claimed to retain all digital records gathered from local customers inside the country. And the company can’t change anything in the software on cars in China Without referring to authorities. Tesla cars are forbidden to be used near military bases and other sensitive government premises.
Why Chinese want Tesla in China
In May the Chinese authorities put strict restrictions on automotive data collection. Electric-car makers are not allowed to transfer any kind of gathered data from users on China’s roads and highways outside China. Starting from the first of November, the personal-data protection law took a serious step. So no more information from Chinese consumers will lead to a real problem for the company. After those unfixable decisions, it will be harder for Tesla to develop autonomous vehicles in China. Because collecting data is the ground of autonomy.
In this situation Elon Musk found himself acting against the personality that we know. Surprisingly he becomes a strong supporter of China’s ruling Communist Party, which is so weird. Musk once called the U.S President a labor union sock puppet on Twitter because he ignored Tesla. “China’s game isn’t to let Tesla win, China’s game is to make the domestic industry compete,” said Bill Russo, founder of Automobility, a Shanghai-based consulting firm.
The importance of Tesla’s factory in China
Leaders in China build their hopes on Tesla to improve the performance of domestic electric-vehicle companies. The way to do that is by localizing Tesla’s supply chain and grooming Chinese manufacturers. Miao Wei, who negotiated on the deal with Mr. Musk, comprised this situation as lobbing a predatory catfish into a pond full of sluggish fish. It’s not surprising to say that Tesla did it. Chinese investors started to trust the electric-vehicle market again, which brings hope to the domestic startups. One of these startups is ZoZo Go, its CEO Michael Dunne said “Pre-Tesla, nobody believed that a Chinese brand could be riveting,”.
EVs sales in China
ZoZo Go expects overall sales in China to be roughly 3.1 million this year, which is more than double last year. Tesla had reached over 90% of the “domestic supply sourcing ratio” Shanghai factory. Which according to its top China executive, Tom Zhu, will allow Tesla to source all of its vehicle components locally very soon. In October, Musk said that Tesla’s factory in China makes more vehicles than Tesla’s in Fremont, Calif. Morgan Stanley, an analyst said that
Tesla may lose its position in China to domestic competitors. And if it makes 15% of China’s all-electric vehicle market this year, it won’t make more than 7% by 2030. Elon Musk or Ma Si Ke in the Chinese language is a role model and an inspiration for a lot of Chinese tech entrepreneurs. Even trademarked started using his name on products. Do you think Elon Musk and China’s relationship will last forever?
This sounds like a hit piece…… Is China’s protecting its markets… Isn’t that what trump wanted to do…. America first… I think that was a dirty word to the democrats… None of this article makes any sense back is factoring in the fact that the democrats hate musk…. why you say why do they hate musk…. He’s not playing the Union kickback game…. Follow the money…..
China sucked him in ,will stel his technology and redesign it and shut him out …then throw him out