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Elon Musk made a surprise visit to Beijing on Sunday to meet with Premier Li Qiang, China’s No. 2 leader, as Tesla battles declining sales and data security concerns in the world’s biggest car market.
Mr Musk arrived in the Chinese capital on Sunday afternoon and met with Mr Li. The electric car maker’s chief was trying to overcome recent setbacks, including in China, by refocusing Tesla on artificial intelligence with a planned “robotaxis” service.
China, Tesla’s second-largest market after the United States, has seen sales slump this year and Musk’s ambitions to boost Tesla’s appeal with new self-driving features have been curtailed by China’s customer data usage restrictions. This is especially important because it has been
The country’s state television reported that Li described Tesla’s operations in the country as a “successful example” of economic and trade cooperation with the United States. These are comforting words at a time of heightened trade tensions between China and the United States, particularly over technology.
State media also reported that Musk said Tesla wants to deepen cooperation with China and praised the company’s Shanghai factory as its best-performing factory.
“It was an honor to meet with Prime Minister Li Qiang,” Musk said. post on his social media platform, X. “We’ve known each other for years, since the early days of Shanghai.”
Li was a senior Communist Party official in Shanghai in 2018 when Musk decided to invest in the eastern Chinese city.
According to Chinese state media, Tesla’s top executives also met with Ren Hongbin, chairman of the China Council for the Promotion of International Trade, a group under the Ministry of Commerce.
Details of the meeting were not disclosed, and Tesla did not immediately respond to questions.
The visit comes a little more than a week after Musk abruptly canceled a visit to India in which he was scheduled to meet Prime Minister Narendra Modi as he seeks to start production in the country.
Tesla’s stock price has fallen by almost a third so far in 2024 as it loses ground to local rivals in China, the world’s largest car market by volume. At the same time, the company is facing slowing global growth in EV sales, forcing it to cut thousands of jobs.
The group’s sales in China fell 4% year-on-year in the first quarter, despite a 32% increase in total production of new energy vehicles, including hybrid vehicles, according to data from Automobility, a Shanghai consulting firm. The total was 132,420 units.
The figures show Tesla’s domestic market share in the sector is 7.5%, far behind Warren Buffett-backed Chinese EV maker BYD’s 33%.
Tesla’s performance in China contributed to a worse-than-expected first-quarter profit as Mr. Musk promised to bring forward the launch of “more affordable” models.
He said on an earnings call last week that he hoped Tesla would gain regulatory approval to expand its self-driving capabilities in China.
But the group’s ambitions to roll out more advanced self-driving technology in China are complicated by the need to store user data locally, which is needed to improve the system, which is primarily being developed in the United States. There is.
China’s powerful Cyber Administration has raised concerns about Tesla’s data collection in the past.
The world’s second-largest economy is Tesla’s largest market outside the United States and is a key part of the company’s electric vehicle supply chain.
Musk’s decision to build a multibillion-dollar gigafactory in Shanghai is believed to have helped usher in the rapid growth of China’s EV industry.
However, Tesla recently lost market share in China after its decision to cut prices there in late 2022 triggered a price war and fierce competition in the domestic car market. The group is also slower to release new models than its competitors.
Besides BYD, which competes with Tesla as the world’s largest EV producer and currently lags slightly behind in global sales, Mr. It also faces significant competition.
Analysts have also warned that Musk’s China operations could be vulnerable to geopolitical retaliation from security hawks in Beijing.
Musk-owned social media platform X, formerly known as Twitter, is banned in China. Officials have also expressed concerns about the relationship between Musk’s commercial rocket and satellite business, SpaceX, and the U.S. military.
This article has been corrected to correctly attribute Tesla’s stock price decline to this year.
