Tesla’s CEO, Elon Musk, made an unexpected appearance in Beijing, where he engaged in discussions with Chinese Premier Li Qiang. This visit comes shortly after Musk postponed his anticipated trip to India to confer with Prime Minister Narendra Modi.
His decision to bypass India was driven by the necessity to solidify plans for establishing a Tesla factory within the nation’s borders. Now, Musk finds himself in Beijing, a crucial move as the Chinese market for electric vehicles (EVs) continues to grow, posing a potential threat to Tesla’s market share.
Speculation surrounds Musk’s visit to China, with many anticipating the unveiling of Tesla’s autonomous driving technology within the rapidly expanding EV market. During his meeting with Premier Li, discussions centered on future expansion strategies for Tesla’s automotive endeavors. This rendezvous, as reported by the state-run Xinhua news agency, took place on Sunday in Beijing.
Facilitated by an invitation from the China Council for the Promotion of International Trade, Musk engaged in talks with CCPIT president Ren Hongbin, exploring avenues for enhanced collaboration with the nation. Additionally, Musk is slated to meet with high-ranking Chinese officials at the State Council and reconnect with acquaintances in Beijing, as detailed by the South China Morning Post.
Since the inauguration of its USD seven billion Shanghai factory in 2020, Tesla has garnered significant traction in the Chinese EV market. However, stiff competition from domestic EV manufacturers has necessitated price reductions of up to six percent for Tesla’s Shanghai-manufactured vehicles, aimed at preserving its dominant position within China’s premium EV segment.
Grace Tao, Tesla’s vice-president of external relations in China, underscored the pivotal role of autonomous driving in propelling growth within the country’s new energy vehicle sector. She posited that this technology would catalyze the emergence of novel business models, such as robotaxis—a vision championed by Musk himself.
Notably, Musk’s visit to China coincides with the commencement of the 2024 Beijing Auto Show. Despite geopolitical tensions between the US and China, Musk continues to enjoy a favorable reception in Beijing, owing to his steadfast support for the city.
During previous visits, Musk has been accorded special privileges, including access to the Zhongnanhai compound, the official residence of Chinese leaders. Such gestures underscore the significance of Musk’s relationship with Chinese authorities and his contributions to the nation’s technological landscape.
Public sentiment in China regarding Musk’s visit has been overwhelmingly positive, with social media platforms abuzz with discussions surrounding his culinary experiences and endearing monikers such as “pioneer” and “brother Ma.” Tesla’s dominance in China’s premium EV market was further solidified by the delivery of over 600,000 Model 3s and Model Ys from its Shanghai Gigafactory in the preceding year—an increase of 37.3 percent compared to 2022.
In a demonstration of its long-term commitment to the Chinese market, Tesla recently acquired land in Shanghai for the construction of a factory dedicated to producing Tesla Megapack batteries, utilized in battery storage facilities. However, amidst this show of dedication, Tesla announced plans to reduce its global workforce by more than 10 percent, citing the need to streamline operations and bolster efficiency in preparation for future growth phases.
Musk emphasized the necessity of this decision in an email to employees, acknowledging the challenges posed by redundancies in certain roles. Despite these measures, Tesla remains resolute in its pursuit of sustained growth, albeit tempered by uncertainties regarding sales projections for the upcoming year.