Elon Musk, who recently postponed a planned visit to India to meet with Prime Minister Narendra Modi to finalize arrangements for opening a Tesla factory in the country, is now visiting Beijing amid rising sales of local EVs, posing a challenge to Tesla’s market in China. During a spontaneous trip to Beijing, amidst speculation about unveiling Tesla’s autonomous driving tech in China’s growing EV market, billionaire Elon Musk met with Chinese Premier Li Qiang on Sunday. They discussed future expansion plans for his automotive company.
Honored to meet with Premier Li Qiang.
We have known each other now for many years, since early Shanghai days. pic.twitter.com/JCnv6MbZ6W
— Elon Musk (@elonmusk) April 28, 2024
Li assured Musk that China’s vast market will remain accessible to foreign-funded businesses. He emphasized China’s commitment to expanding market access and enhancing services to offer foreign-funded enterprises a more favourable business environment and increased support. This ensures that companies from all nations can invest in China confidently.
Li highlighted Tesla’s success in China as a prime example of fruitful economic collaboration between the US and China. He stressed the importance of equal cooperation and mutual benefits for both nations. Li expressed optimism that by following the strategic guidance of their leaders, the US and China could further promote stable bilateral relations.
“It is hoped that the US and China will meet more halfway and promote the stable development of bilateral ties under the strategic guidance of the two heads of state”, the Chinese premier stated.
According to official media reports, Elon Musk described Tesla’s Shanghai Gigafactory as the company’s most successful facility and expressed his eagerness to enhance collaboration with China for more mutually beneficial outcomes. Additionally, the chief of SpaceX and Tesla journeyed to China at the invitation of the China Council for the Promotion of International Trade. During his visit, he held discussions with CCPIT president Ren Hongbin regarding further cooperation with the nation, as reported by the official broadcaster CTGN.
According to the Hong Kong-based South China Morning Post, Elon Musk is anticipated to convene with high-ranking Chinese officials at the State Council and reconnect with his “old friend” in Beijing.
Since establishing a $7 billion factory in Shanghai, Musk’s Tesla has gained popularity in China, where it commenced production in 2020.
Based in Austin, Texas, Tesla has encountered robust competition from Chinese EV manufacturers in recent years. To uphold its dominance in China’s premium EV market segment, the company has slashed the prices of its vehicles manufactured in Shanghai by up to 6%.
According to the Post, Grace Tao, Tesla’s vice-president of external relations in China, penned a commentary in the official newspaper People’s Daily on Friday, highlighting autonomous driving as a pivotal catalyst for growth in the country’s new energy vehicle sector. She argued that this technology will spawn new business models such as robotaxis, a vision championed by Musk.
Musk’s recent visit to China aligns with the 2024 Beijing Auto Show, which commenced on Thursday. Despite concerns in Washington over China’s ascent, Musk, a staunch supporter of Beijing in the US, receives VIP treatment in China.
In 2019, Tesla was granted permission to drive vehicles into the Zhongnanhai compound, the residence and workplace of Chinese leaders, during a meeting with former Premier Li Keqiang. During Musk’s three-day visit to Beijing last June, he was greeted by then-Foreign Minister Qin Gang, as per the Post report.
The Chinese public warmly embraced Elon Musk’s visit, with social media abuzz about the Chinese cuisine he sampled, and some affectionately referring to him as a “pioneer” and “brother Ma.”
As the leader in China’s premium EV sector, Tesla delivered 603,664 Model 3s and Model Ys produced at its Shanghai Gigafactory to customers in China last year, marking a 37.3% increase from 2022. This growth rate mirrors the 37% surge in sales recorded in 2022 when approximately 440,000 vehicles were delivered.
Since entering the market in 2012 and establishing its largest factory in Shanghai, Tesla has sold over 1.7 million vehicles in China, enjoying substantial political backing for its endeavours from Musk.
In a demonstration of its ongoing commitment to China, Tesla acquired a parcel of land in Shanghai to construct a factory with a planned annual capacity of 10,000 Tesla Megapack batteries, primarily utilized for battery storage stations.
His visit to China coincides with Tesla’s recent announcement of plans to reduce its global workforce by more than 10% as part of cost-cutting measures to enhance productivity.
In an email, Elon Musk stated, “As we prepare the company for our next phase of growth, it is crucial to examine every aspect of the organization to identify opportunities for cost reduction and increased efficiency.” He noted that Tesla’s expansion had resulted in duplication of roles and functions in certain areas.
Elon Musk added, “As part of this initiative, we have conducted a comprehensive review of the organization and made the tough decision to reduce our workforce by more than 10% globally. It’s not something I take lightly, but it’s necessary. This will allow us to operate in a lean, innovative, and ambitious manner as we move into the next phase of growth.”
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