Tesla CEO’s China Deal: Elon Musk Faces Criticism over Dependence on Beijing

Elon Musk’s Vulnerability Exposed by China’s Favors: New York Times

During a recent trip to Shanghai, Tesla CEO Elon Musk was granted special privileges by the Chinese government to set up a Tesla plant in the country. This move has sparked controversy among critics who argue that it may leave him vulnerable to leverage from Beijing. The New York Times reported on Musk’s close relationship with China’s government and how concessions were offered by the Chinese government to facilitate the construction of the Tesla plant in Shanghai, which began in 2019.

One of the perks offered to Tesla by China was low-interest loans, which helped the company establish its presence in the country. In addition, China introduced a new emissions credit policy that benefited Tesla, and ownership rules were changed to allow Tesla to set up without a domestic partner. As a result, the Shanghai plant now accounts for over half of Tesla’s global deliveries, making the company increasingly reliant on the low production costs in China in an intensely competitive electric vehicle market.

However, with China building its own strong EV 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. Musk has emphasized that his companies are separate entities, but he has shown support for China on various issues, including Taiwan.

Tesla, SpaceX, and Musk have not provided comment to The New York Times or Business Insider on this matter. However, it is clear that Musk’s decision to set up a plant in China has made him increasingly reliant on the country and its low production costs in an effort to compete effectively in an intensely competitive electric vehicle market.

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