In recent years, Elon Musk has established a close relationship with the Chinese government, which has granted him special privileges to set up a Tesla plant in the country. While this partnership has been beneficial for Tesla, critics argue that it may leave Musk vulnerable to leverage from Beijing.
According to former Tesla employees, diplomats, and policymakers, China offered concessions to facilitate the construction of the Tesla plant in Shanghai, which began in 2019. Among these perks were low-interest loans, a new emissions credit policy that favored Tesla, and changes to ownership rules that allowed Tesla to operate without a domestic partner. As a result of these incentives, the Shanghai plant now accounts for over half of Tesla’s global deliveries, making the company increasingly reliant on low production costs in China in an intensely competitive electric vehicle market.
However, as China continues to build its own strong electric vehicle industry, Tesla is facing challenges in the market. US lawmakers have raised concerns about Musk’s dependence on China, especially considering his ownership of SpaceX, a satellite company with valuable Pentagon contracts. While Musk has emphasized that his companies are separate entities and he supports China on various issues including Taiwan, some worry about the potential risks associated with such close ties.
Tesla and SpaceX have not provided any comment on this matter to The New York Times or Business Insider.
