Tesla’s Special Treatment in China: Can Elon Musk Keep his Business Independent amidst Chinese Leverage?

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

Tesla CEO Elon Musk was granted special privileges by the Chinese government to set up a Tesla plant in the country. However, critics argue that this may leave him vulnerable to leverage from Beijing. The New York Times reported that Musk’s close relationship with China’s government has been described by former Tesla employees, diplomats, and policymakers.

Among the perks offered to Tesla by China were 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, the Shanghai plant now accounts for over half of Tesla’s global deliveries, making the company increasingly reliant on the low production costs in China in a highly competitive electric vehicle market.

Tesla is facing challenges in the market as China builds its own strong EV industry. 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 but he has shown support for China on various issues including Taiwan.

Tesla, SpaceX and Musk have not provided comment to The New York Times and Business Insider reached out to them for comment on this matter.

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