Elon Musk attempts to charge up Tesla sales with talks in China

Elon Musk has made a surprise visit to Beijing to meet China’s premier.

As western governments accuse the country of flooding the global market with cheap electric vehicles, the Tesla chief executive met Li Qiang and other officials, who told Musk, 52, that the carmaker’s manufacturing in China was an example of strong Chinese-American trade co-operation, according to local media. Musk said that “it’s good to see electric vehicles make progress in China. All cars will be electric in the future.”

He is meeting senior Chinese officials in an effort to win approval for the rollout of Tesla’s self-driving technology after privacy and data concerns prevented the carmaker from installing its autonomous driving system in Chinese cars.

Musk’s visit coincides with Auto China, the vast Beijing motor show. He was said to be due to meet the government official in charge of international trade and the organiser of the event.

China, the world’s largest producer of electric vehicles, has come under fire from governments in the United States and the European Union for flooding western markets with cheap vehicles. During a visit to Beijing this month, Janet Yellen, the US Treasury secretary, accused China of “industrial overcapacity” and said that Chinese companies were “undercutting the business of American firms and workers, as well as of firms around the world, including in India and Mexico”.

China’s production capacity for new electric vehicles is forecast to reach 36 million next year, with an estimated 17 million in local sales and 20 million in surplus supply. The country is Tesla’s second largest market and the largest provider of premium electric vehicles, but it is being undercut by cheaper local producers, such as BYD. Tesla’s Model 3 and Model Y cars are produced at the company’s Shanghai gigafactory.

Musk is seeking Chinese regulatory approval to introduce Tesla’s high-end autonomous driving software in the country, which was brought to America and Europe more than four years ago, but it has been stymied by Chinese privacy concerns. Musk said in a social media post that the technology would be coming to China “soon”.

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Chinese authorities have banned Tesla cars from military compounds and some government sites owing to the cameras that are installed in the vehicles. Chinese producers such as Xpeng and Li Auto also offer autonomous driving in their vehicles.

Dan Ives, the Wedbush analyst, said: “If Musk is able to obtain approval from Beijing to transfer data collected in China abroad, this would be a ‘game-changer’ around the acceleration of training its algorithms for its autonomous technology globally. We also believe this trip will be significant for Tesla and Musk further strengthening its EV footprint within the Chinese market at a pivotal time.”

This month Tesla said it was cutting 10,000 jobs after its car sales slowed at the start of the year. It delivered 387,000 Teslas in the first quarter of the year, down 9 per cent on the previous year and undershooting Wall Street estimates by 13 per cent.

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