Elon Musk, the CEO of Tesla, may travel to China this week, according to Reuters, which cited sources. In addition, Musk hinted to a rupture with China earlier this month by citing « constraints » on capacity expansion in the nation.
However, the visit is not guaranteed because neither Tesla nor China’s State Council Information Office have responded to Reuters’ request for remarks.
Tesla operates its enormous Gigafactory in China, which is the business’s largest and most productive operation, and satisfies both local demand and exports of automobiles to other nations.
Tesla has asked to increase the capacity at its China Gigafactory by 450,000 vehicles. The nation hasn’t agreed to the request yet, though.
Musk made an apparent allusion to the country’s rift earlier this month when he stated, there are certain limits on our capacity to expand in China, and so we’re building as many cars as we can.
China and Tesla have had a tremendous year in terms of ties. Tesla vehicles were not allowed inside several government buildings in China in 2021 due to « spying concerns. »
Despite Musk’s denial, China took issue with the idea that Tesla vehicles may be used for espionage. In order to locally store all the data gathered in the nation, he even established a new data center in China.
On account of worries over Starlink, China reportedly postponed the expansion of Tesla’s China Gigafactory. The nation has stringent internet firewalls that Starlink, in its opinion, can get through.
China reprimanded Musk earlier this year when he responded to a tweet over the Wuhan lab leak report.
This month, Musk could travel to China.
It’s noteworthy that there have been prior rumors that Musk would travel to China in April. The billionaire’s most recent trip to China took place in 2020, just before COVID-19 lockdowns were implemented. Musk’s stage dance at that event was one of his most remembered « performances. »
Since the outbreak, few businessmen have visited China. However, a number of corporate executives have recently been to China, including Pfizer CEO Albert Bourla and Apple CEO Tim Cook.
During the trip, Cook was all acclaim for China and the friendship between Apple and China.
Notably, China is attempting to improve partnerships with both local and foreign IT businesses despite an economy that is structurally weakening.
Tesla said last month that a new facility will be built in Shanghai to produce Megapacks.
Tesla would start building the factory in the third quarter of this year, with manufacturing starting in the second quarter of 2024.
The facility would be able to generate 10,000 Megapack units per year, which is 40 gigawatt hours of energy storage.
USA-China Tensions are Increasing
One of the US businesses involved in the geopolitical conflict between the US and China is Tesla.
Tom Zhu, Senior Vice President of Automotive at Tesla, responded negatively to a query from an analyst during the investor day in March about whether the company’s operations in China may be impacted by US-China tensions.
According to Zhu, « We actually produce a lot of employment for the local community, and we also with — with the factories of our suppliers, we’ll create a lot of jobs as well as contribute significantly to the local economy. I don’t believe that risk is too great as long as we are required in this nation.
Musk has frequently defended China’s stance on Taiwan and predicted that the communist nation will soon try to seize control of democratic Taiwan.
Musk tried to improve relations with China by supporting its stance on Taiwan, but despite this, the government hasn’t yet given Musk permission to increase its automotive activities, presumably because China is now trying to strengthen its own EV firms.
