Musk strengthens ties with China
On May 30th, Elon Musk began his trip to China, marking his first visit to the country since the COVID-19 pandemic. Amid escalating disputes with the United States, the CEO of Tesla remains supportive of China, making him one of the few leaders of technology companies in Silicon Valley who maintain such a stance, according to TechCrunch.
This attachment is not surprising considering the increasingly important role China plays in Tesla's expanding electric vehicle empire. In the first quarter, more than half of the automaker's deliveries were made to China, partially due to its competitive pricing strategy.
Musk's visit to China has the potential to strengthen Tesla's ties to the world's largest automotive market. On the first day, Musk met with Chinese Foreign Minister Wang Yi, indicating the high importance Beijing places on this visit.
During the meeting, Wang emphasized that China's development is important for the entire world. Musk affirmed this, stating that Tesla is against decoupling or disrupting supply chains and is ready to expand its business in China.
Against this backdrop, reports emerged in the press that Twitter is introducing elements of censorship regarding posts about China. In particular, the German publication Tagesspiegel reported several cases where users' posts critical of the Chinese government and propaganda disappeared from the platform.
On the first day of his visit, Musk also decided to have lunch with a key supply chain partner. He met with Zeng Yuqun, chairman of Contemporary Amperex Technology Co. Limited (CATL), the world's largest battery manufacturer and one of Tesla's top three battery suppliers along with LG and Panasonic. Since 2020, Tesla has been using CATL batteries in its China-made vehicles and quickly became the battery manufacturer's largest client.
Batteries are the heart of electric vehicles, significantly impacting their overall energy efficiency and cost. Ensuring a stable and reliable battery supply is critical for Tesla. Musk's meeting with the head of CATL may signify his intention to strengthen cooperation with this supplier and ensure the reliability and safety of batteries in Tesla vehicles.
Tesla continues to actively expand its presence in the Chinese market. On May 26th, a ceremony was held to open Tesla's new facility in Shanghai, located next to the Gigafactory Shanghai plant where Tesla manufactures vehicles for the Chinese market.
According to Musk, the newly operational facility will produce aluminum parts for Tesla vehicles, helping to increase localization of production and reduce costs for Chinese consumers.
The expansion of production in China demonstrates Tesla's significant interest in this market. China is the world's largest market for electric vehicles, and by producing vehicles locally, Tesla solves the issue of high import duties and ensures competitive prices.
Penetrating the Chinese market has been crucial for Tesla, and Musk continues to express his support for China and the development of the electric vehicle industry in the country.