June 13, 2024

Elon Musk’s Special Privileges in China: Can He Avoid the Risks of Dependence on Beijing?

1 min read
Elon Musk’s Vulnerability Exposed by China’s Favors: New York Times

In 2019, Tesla CEO Elon Musk was granted special privileges by the Chinese government to set up a Tesla plant in the country. This move has sparked debate among critics who fear that Musk may be vulnerable to leverage from Beijing. According to former Tesla employees, diplomats, and policymakers, the Chinese government offered concessions to facilitate the construction of the plant, including low-interest loans, a new emissions credit policy that benefited Tesla, and changes to ownership rules that allowed Tesla to set up without a domestic partner.

As a result of these perks, the Shanghai plant now accounts for over half of Tesla’s global deliveries, making the company increasingly reliant on low production costs in China in a highly competitive electric vehicle market. However, with China building its own strong EV industry, Tesla finds itself facing challenges in the market. Concerns have been raised by US lawmakers regarding Musk’s dependency on China, especially considering his ownership of SpaceX, a satellite company with valuable Pentagon contracts.

Musk has emphasized that his companies are separate entities and has shown support for China on various issues, including Taiwan. Despite this, concerns persist about Musk’s close relationship with China’s government and his potential vulnerability to leverage from Beijing. Neither Tesla nor SpaceX has provided comment to The New York Times or Business Insider on this matter.

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