Elon Musk made headlines when he unveiled the first Chinese-made Teslas in Shanghai in 2020, breaking into an impromptu dance on stage. Stripping off his jacket in a partial striptease, Musk celebrated the success of his bet on China, where he found cheap parts and skilled workers that saved Tesla from failure.
The relationship between Musk and China proved highly beneficial, with the Shanghai factory accounting for over half of Tesla’s global deliveries and the majority of its profits. However, Tesla’s recent struggles in China have raised concerns about Musk’s ties to Beijing and the company’s future in the market.
Through interviews with former Tesla employees and policymakers, it was revealed that Musk had built a close relationship with Chinese leaders, securing concessions and subsidies that boosted Tesla’s profits. The company benefited from a crucial policy change on national emissions regulations, which directly impacted its profits in China.
Despite initial success, Tesla now faces stiff competition from Chinese electric car manufacturers, threatening its dominance in the market. Musk’s dependence on China has drawn scrutiny from U.S. policymakers, who are examining his ties to the country and how they affect his other ventures, including SpaceX and X.
As Tesla’s future in China remains uncertain, Musk finds himself walking a fine line between warning about Chinese rivals and maintaining his ties to the country. With Tesla deeply entrenched in the Chinese market, Musk’s business interests in China have come under scrutiny, raising questions about his stance on contentious issues like Taiwan and Xinjiang.
While Tesla’s success in China was a major win for the company, questions remain about the extent of government support it received. In both California and China, Tesla lobbied for emissions regulations that benefited its business, raising concerns about the company’s reliance on government help to survive and thrive in competitive markets.