He gained access to top leaders and secured policy changes that benefited Tesla. He also got workers accustomed to long hours and fewer protections, after clashing with U.S. regulators over labor conditions at his California plant. The Shanghai factory helped make Tesla the most valuable car company in the world and Mr. Musk ultrarich.
But Tesla is now struggling. Mr. Musk helped create his competition, Chinese E.V. makers that are taking market share and becoming a security concern for the United States and Europe.
Tesla benefited from a Chinese policy it helped shape.
In California, where Tesla launched its first car in 2008, the company has profited from an emissions mandate that allows it to sell credits — billions of dollars worth of them — to automakers that cannot meet pollution targets.
As Mr. Musk turned to China, his lobbyists encouraged leaders there to adopt a similar policy. Emails and other documents we obtained show they worked through California environmentalists intent on cleaning up China’s air.
Beijing adopted the policy, which was also being promoted by groups unconnected to Tesla, in 2017. After Tesla opened its Shanghai factory in 2020, the company earned hundreds of millions of dollars in credits through the policy, according to the market analysis company CRU Group.
Mr. Musk’s fortune is tied to Tesla’s Shanghai factory.
The Shanghai factory has replaced Tesla’s plant in Fremont, Calif., as its largest and most productive, accounting for over half of the company’s global deliveries and the bulk of its profits.
As the plant took shape in just under a year, Mr. Musk worked closely with a city official who is now China’s premier, Li Qiang. Under Mr. Li’s watch, state-run banks offered Tesla low-interest loans, a deal so generous that a senior auto official recalled a minister balking at it.
China also changed ownership rules so that Tesla could set up without a local partner, a first for a foreign auto company in China.
Mr. Musk saves on production and labor costs in Shanghai and cannot easily extricate himself, should he ever want to. Because the billionaire’s wealth is tied up in Tesla stock, his personal fortune now hinges on what happens in China.
Tesla’s growth in China has bound Mr. Musk to Beijing.
Mr. Musk’s reliance on the Shanghai factory may give Beijing leverage over him.
That’s a concern because a second company of Mr. Musk’s, SpaceX, has sensitive Pentagon contracts and controls much of the world’s satellite internet through its Starlink network.
Mr. Musk has said that his companies should not be conflated. But he has also praised Chinese leaders and taken China’s side in geopolitical disputes, even as he rails against politicians in the United States.
In an online conversation with two members of Congress in July, he called himself “kind of pro-China.”
Source: https://dnyuz.com/2024/03/27/how-elon-musk-became-kind-of-pro-china/
