Original: Zhanhao Source: official account: Zhanhao WeChat ID: zhanhao668
Tesla’s CEO Elon Musk’s visit to China, as the most popular entrepreneur in the world, is indeed heavyweight news in the current context of extremely tense Sino US relations. What caught public opinion even more off guard was the rumor from Reuters that he was visiting China on the first day, but his private flight landed at an airport in Beijing the next day. This speed was really fast, and the media didn’t even have room for hype.
So, why did Musk visit China so quickly? In Zhan Hao’s view, there are three main reasons behind this:
1? China saved Musk, which is a blessing for Musk
Although American politicians and some entrepreneurs hate China to the bone, Musk has a good impression of China because, to some extent, China saved him!
Musk’s last visit to China was in early 2020, shortly after Tesla’s Shanghai factory was completed. For Musk, building a factory in Shanghai, China was a major event. It is no exaggeration to say that it was the construction of a factory in Shanghai that helped him out and saved him. Otherwise, Wall Street capital would have kicked Steve Jobs out of Tesla just like they did when they kicked him out of Apple. At that time, in order to resist pressure from Wall Street, Musk was even forced to claim that he would launch himself to Mars and not return.
The construction of a factory in Shanghai directly increased Tesla’s production capacity by 500000 vehicles, saving Musk and making him the world’s richest man. The annual production capacity of 500000 vehicles in Chinese factories is too impressive, breaking through the bottleneck that Tesla was unable to produce on a large scale before. The fundamental reason why Tesla achieved a breakthrough in China is due to China’s advantages in the industry chain of new energy vehicles. For Tesla, relying on China as an industrial base, Tesla can continue to expand its global market. On the contrary, losing the support of China’s industrial chain would be a major blow to Tesla, as no country’s industrial chain can support Tesla’s development.
So, China is a land of development for Musk.
2? Musk fundamentally opposes the United States’ practice of “decoupling and chain breaking”
If a new Cold War really breaks out between China and the United States, and there is a pattern of “decoupling and disconnection”, it would be a disaster for Tesla. Therefore, from Musk’s original intention, he is opposed to the US “decoupling and disconnection” policy, so he has never been the same as those politicians in the United States. This visit to China, in terms of timing, is at a time of extreme turbulence in Sino US relations, and can be said to be a heavy slap on the face of the anti China faction who have “decoupled and broken the chain” in the United States. Tesla’s success in China represents the interests of Sino US cooperation and sets an example for Western countries.
According to data released by Tesla, Shanghai’s super factory delivered 711000 cars in 2022, a year-on-year increase of 48%. Tesla delivered a total of 1.31 million vehicles globally in 2022, a year-on-year increase of 40%, and still ranks first in global pure electric vehicle sales. Among them, the contribution of Shanghai super factories reached 54.2%, an increase from 51.7% in 2021, continuing to support more than half of Tesla’s global production.
For Shanghai, it is also a huge achievement. Since its production in 2019, Tesla’s Shanghai factory has steadily expanded its production capacity. In 2022, the annual production of electric vehicles has reached 727000 units, a year-on-year increase of 49.7%; The output value is 183.9 billion yuan, accounting for 23% of Shanghai’s automobile manufacturing industry and driving a 1.3 percentage point increase in the city’s industrial output value. Moreover, Tesla’s drive has further strengthened China’s advantages in new energy vehicles. China’s automobile exports have become the world’s number one in 2023, and Tesla is the leader in China’s new energy vehicle exports.
According to media reports, Tesla’s Shanghai Super Factory has achieved a localization rate of over 95% for components, driving 360 upstream suppliers, 100000 job opportunities, and a cumulative order of 700 billion yuan. In addition, it has helped 60 Chinese suppliers enter Tesla’s global supplier system. It is no exaggeration to say that Tesla has largely driven the development of China’s new energy vehicle industry.
Moreover, Tesla’s visit to Shanghai to build a factory was at the beginning of the Sino US trade war, objectively offsetting the atmosphere of the United States suppressing China in the past few years. It is no exaggeration to say that when Shanghai decisively introduced Tesla, looking back now, it is a miraculous stroke with a super high perspective and significant significance.
3? Musk wants to increase investment in China
The background of Musk’s visit to China is not simple. The reason is very simple. Firstly, the global demand for new energy vehicles is increasing, and Musk has seen this market space. To occupy a broader global market, Tesla must rely on China’s industrial chain. When Musk visited China, the first thing he went to see was Ningde Times, the world’s favorite automotive battery supplier, which has already shown the problem.
Musk’s visit to China this time also received a super high standard reception. Last time Apple CEO Cook visited China, he was received by the Minister of Commerce. This time, Musk’s visit to China was first met by State Councilor and Foreign Minister Qin Gang, followed by Minister of Industry and Information Technology Jin Zhuanglong, and then Minister of Commerce Wang Wentao. According to sources quoted by Bloomberg, Musk may also meet with higher-level leaders of the Chinese government to discuss the advanced driving assistance system Tesla is seeking to introduce in China. What do these meetings illustrate? Explain that Musk came to China this time with dry goods! According to media reports, Musk’s visit to China this time involves issues such as autonomous driving, battery supply, and new factory construction.
Especially for newly built factories, there are now two theories. One is to expand the production capacity of the Shanghai factory from 1.25 million to 1.75 million vehicles; Another approach is to build new factories in other provinces and cities. Either way, it is a significant benefit for China and Tesla.
For China, having companies like Tesla invest on a large scale indicates at least two things:
Firstly, the business environment and industrial chain in China are very good. Otherwise, Tesla would not have invested in China like this, especially the success Tesla has achieved after investing in China, which will further stimulate companies including Germany to invest in China on a large scale.
The second is that the US government’s “decoupling and chain breaking” plan is retroactive. Imagine, even the toughest companies in the United States do not support the US government’s plan. How can other countries support it? So, this is undoubtedly a heavy blow to the United States’ plan to suppress China.
When Musk visited China this time, upon arriving in Beijing, he was met by State Councilor and Foreign Minister Qin Gang. This standard of reception can be said to be a slap on the face of the US government and a declaration to the international community. We all know that high-ranking officials in the US government have repeatedly requested visits to China without permission, but Musk was able to meet China’s State Councilor and Foreign Minister when he arrived in China. This indicates that the issue between China and the US is a problem of the US government, caused by the US government’s improper attitude and lack of sincerity. At the same time, Qin Gang’s meeting also announced to the world that China welcomes entrepreneurs from various countries to develop in China.
Let’s take a look at Qin Gang’s words and everything will be clear. During his meeting with Musk, Qin Gang stated that China will continue to steadfastly promote high-level opening-up and is committed to creating a better market-oriented, legal, and international business environment for enterprises from various countries, including Tesla. China’s development is an opportunity for the world. A healthy, stable, and constructive Sino US relationship is beneficial to both China and the United States, as well as to the world. Timely “apply the brakes” to avoid “dangerous driving”; Be good at “stepping on the accelerator” and promote mutually beneficial cooperation.
Next, Musk also met with the Minister of Industry and Information Technology and the Minister of Commerce, which shows that Musk’s visit to China involves at least high-end technology and significant investments. If Tesla were to increase its investment in China on a large scale at this time, it would undoubtedly be a response to the US government, and this response could be described as a combination of hard work and hard work – well done!
In addition, Musk recently made a statement with a very high stance, stating that achieving reunification is an official policy of China, which does not need to be interpreted as implicit, but should be taken seriously. Musk’s statement has a high level of proficiency, which seems to support China’s reunification on the Chinese side, but the United States sounds like it means taking it seriously. As a result, after speaking these words, he received a high standard reception in China. It must be said that Musk’s intelligence and emotional intelligence were both excellent, not only boasting the world’s number one, but also doing things really well!
Next, let’s wait and see Musk’s big move! He may make big moves, especially making a new round of large investments in China!