Citing sources, Reuters reported that Tesla’s CEO Elon Musk could visit China this week. Incidentally, earlier this month, Musk hinted at a rift with China pointing to “constraints” on expanding capacity in the country.
The visit is not certain though as neither China’s State Council Information Office nor Tesla have yet responded to Reuters’ request for comments.
Tesla runs its massive Gigafactory in China which is the company’s largest and most productive plant – and satiates both the domestic demand as well as exports cars to other countries.
Tesla has submitted a request to expand the capacity at its China Gigafactory by 450,000 cars. However, the country hasn’t yet approved the request.
Earlier this month, Musk said, “There are some constraints on our ability to expand in China, and so we’re making as many cars as we can,” an apparent reference to the rift with the country.
Over the last year, relations between China and Tesla have soared. In 2021, China banned Tesla cars from some government compounds over “spying concerns.”
While Musk denied that Tesla cars could be used for spying, it did not cut ice with China. He even started a new data center in China to store all data collected in the country locally.
Reportedly, China delayed the expansion of Tesla’s China Gigafactory on concerns over Starlink. The country has strict internet firewalls which it believes can be breached by Starlink.
Earlier this year, China chided Musk after he replied to a tweet about the Wuhan lab leak report.
Musk Might Visit China This Month
Notably, there were previously reports that Musk might visit China in April. The billionaire last visited China in 2020 days before the COVID-19 lockdowns were imposed. At that event, Musk danced on the stage which was among his most memorable “performances.”
Not many business leaders visited China since the pandemic. However, of late a flurry of business leaders including Apple CEO Tim Cook, and Pfizer CEO Albert Bourla have visited China.
Cook was all praise for China during the visit and hailed the relations between China and Apple.
Notably, amid a structurally slowing economy, China is looking to amend the relations not only with domestic tech companies but also with international companies.
News: Tesla announced a new Megapack factory in Shanghai China. This facility could produce up to 10k mega packs per year. Tesla continues to add more factories to meet the ever growing demand for battery storage solutions from renewable resources. @elonmusk @TeslaSolar @Tesla… pic.twitter.com/BSl2HJeNfE
— Tesla Owners Silicon Valley (@teslaownersSV) April 12, 2023
Meanwhile, last month, Tesla announced that it would build a new factory in Shanghai to build Megapacks.
Tesla would begin the construction of the plant in the third quarter of this year with production expected to commence in the second quarter of 2024.
The plant would have the capacity to produce 10,000 Megapacks units annually which are equivalent to 40 gigawatt hours of energy storage.
US-China Tensions are Rising
Tesla is among the US companies that are caught in the geopolitical tussle between the US and China.
In response to an analyst question during the investor day in March on whether US-China tensions might impact the company’s business in China, Tom Zhu, who’s Tesla’s Senior Vice President of Automotive, replied in the negative.
Zhu said, “We actually create a lot of jobs to the local community, and we also with — at our suppliers’ factories, we’ll create a lot of jobs as well and will contribute a lot to the local economy. I think as long as we’re needed in this country, I don’t see there much of the risk of that.”
Musk on Taiwan:
The growing belligerence between China and the US “should be a concern for everyone.”
“There is some inevitability to the situation.” @elonmusk
Is it likely to happen? “That is their policy.” 👇 pic.twitter.com/4JHNtRlBMc
— Ian Ellis (@ianellisjones) May 20, 2023
Notably, Musk has backed China’s position on Taiwan multiple times and said that the communist country would eventually seek control over democratic Taiwan.
However, despite Musk seeking rapprochement with China by endorsing the country’s position on Taiwan, it hasn’t yet received permission to expand the automotive operations in the country – apparently as China is now looking to bolster its own EV companies.
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