Tesla chief Musk meets China’s premier in Beijing

News

Unlock the Editor’s Digest for free

Elon Musk met senior Chinese trade officials in Beijing on Sunday as the Tesla chief faces questions over slowing sales growth for his electric vehicles and data security concerns in the world’s biggest car market.

Musk landed in the Chinese capital on Sunday afternoon and met Ren Hongbin, chair of the China Council for the Promotion of International Trade, a commerce ministry group, according to Chinese state media.

No details of the meeting were available and Tesla did not immediately respond to questions.

Musk, on an earnings call last week, said Tesla was hoping to obtain regulatory approval for more autonomous driving capabilities in China. His comment came as the EV maker reported a worse than expected fall in first-quarter profits, and Musk pledged to bring forward the launch of “more affordable” models.

Musk’s arrival in China comes at a tense juncture for the billionaire, who has a complicated relationship with the Chinese Communist party. The world’s second-biggest economy is Tesla’s biggest non-US market, and a vital part of the supply chain for its electric vehicles.

Tesla’s China business has been immensely successful, and Musk’s decision to build a multibillion-dollar gigafactory in Shanghai is credited with helping to spearhead the rapid growth of China’s EV industry.

But the carmaker has been losing market share in recent years, and its decision to slash prices in China in late 2022 sparked a price war that has driven intense competition in the domestic auto market. Tesla’s slower release of new models compared with its competitors has led to it bleeding market share to rivals, notably Warren Buffett-backed BYD.

According to data from Automobility, a Shanghai consultancy, Tesla’s Chinese sales fell 4 per cent in the first quarter this year on year, to 132,420 cars.

Its total number of new energy vehicles sales in China — which includes plug-in hybrids and pure battery EVs — rose 32 per cent in the first three months of the year. That put Tesla’s local market share for new energy vehicles at about 7.5 per cent in the first quarter, far behind 33 per cent for BYD.

Beyond BYD, which now rivals Tesla for the crown of the biggest EV producer globally, Musk also faces emerging competition from Chinese tech groups such as Huawei and Xiaomi, which are increasing bets on EVs.

Analysts have also warned that Musk’s business in China could be vulnerable to geopolitical retaliation from Beijing’s security hawks and the powerful Cyber Administration of China, who have raised concerns in the past about Tesla’s data collection.

X, the Musk-owned social media platform formerly known as Twitter, is banned in China. Officials have also expressed concerns about ties between SpaceX, Musk’s commercial rocket and satellite business, and the US military.

Articles You May Like

Tax measure for ailing Bay Area transit system advances, with caveat
Israel faces wave of condemnation over strike on Rafah camp
House of Lords votes through leasehold reform bill without cap on ground rents
Israel bond lawsuit brings Florida’s anti-ESG law into play
Police drop probe into claims Angela Rayner broke electoral law