Tesla CEO Elon Musk is currently in China for a crucial visit, marking his return to the country’s largest production hub after three years. This visit comes at a time when tensions between the United States and China are high, with various CEOs of top US companies, including Apple’s Tim Cook and JP Morgan’s Jamie Dimon, also making recent visits to China.
Musk’s trip commenced with a meeting with Chinese Foreign Minister Qin Gang in Beijing, where they discussed the business environment for investors, the relationship between the US and China, and the need for cooperation.
During their meeting, Foreign Minister Qin expressed China’s commitment to improving the business environment, including for Tesla, and used a driving metaphor to describe China-US relations. He emphasized the importance of careful driving, avoiding dangerous maneuvers, and skillfully using the accelerator to promote mutually beneficial cooperation. Musk echoed these sentiments, expressing his willingness to expand Tesla’s business in China and opposing the decoupling of the US and China economies. He referred to the two nations as “conjoined twins” and emphasized the need for mutual respect, peaceful coexistence, and win-win cooperation.
US-Chinese relations have been strained due to various issues, such as the shooting down of a Chinese balloon by the US, concerns over arms supply to Russia, and disagreements regarding Taiwan, trade, and human rights. Despite these challenges, both sides acknowledged the importance of maintaining the right direction, steering towards mutual respect and win-win cooperation.
Musk’s visit coincides with the Chinese government’s efforts to revive investor interest in the country’s slowing economy. Foreign companies have been cautious due to recent raids on consulting firms and the tense relationship between China and the US.
While in China, Musk is expected to meet other high-ranking Chinese officials and visit Tesla’s Shanghai plant. The details of these meetings and discussions remain undisclosed.
One notable meeting planned for Musk is with Zeng Yuqun, the chairman of CATL, a key Tesla supplier and a major Chinese battery giant. This meeting highlights the significance of the partnership between Tesla and CATL, which plays a crucial role in the production of electric vehicles.
Tesla faces increasing competition from Chinese-made electric vehicles, raising concerns among investors about the company’s expansion plans for its Shanghai plant. Despite this competition, China’s electric vehicle market remains highly lucrative, often referred to as the “golden goose EV market.” Tesla’s Shanghai plant is considered the heart and lungs of the company’s global production.
Investors also await regulatory clearance in China for Tesla’s advanced driver assistance features, which are available in the US as part of the “Full Self-Driving” software.
Additionally, Musk’s other venture, SpaceX, and its Starlink satellite network have attracted interest and concern from Chinese researchers following Russia’s invasion of Ukraine. Chinese state-owned companies are rushing to launch their own low-Earth orbit communications satellites in response to Starlink.