Are We Underestimating Elon Musk's Diplomatic Abilities?....Quite Possibly

Tesla 6 photos
Photo: Tesla
The business world has long pursued doing business in China based on the knowledge that Chinese consumers gravitate towards American brand name consumer goods, particularly when it comes to sports shoes and casual clothing.
The same ideology applies to the size and appetite of the Chinese premium luxury electric car market. China is the world's largest automotive market and cannot be overlooked. However, the costs of importing new cars to sell in China are quite high and subject to geopolitical conditions. It is much more cost-effective to manufacture inside China by shortening the supply chain and utilizing cheaper labor.

Elon Musk of Tesla learned very quickly that they needed a manufacturing presence in the country if they were going to reach their goal of selling several million cars a year. The company built a giga-factory “Giga Shanghai,” just outside of Shanghai on China's west coast. The facility hosts the final assembly of the Tesla Model 3 and Tesla Model Y to be sold domestically. The factory also supports sales in Europe until the company's new German plant ramps up production.

Breaking ground on a factory and producing cars in a foreign country is a monumental achievement for foreign manufacturers. Even more so in China.

In fact, most foreign automakers from the West, including automotive giants Volkswagen and General Motors, are forced to form corporate partnerships with Chinese entities by policy adopted by Beijing.

Somehow Elon Musk was able to circumvent these policies, becoming one of the few automotive companies operating as a stand-alone entity. Tesla also was the beneficiary of state-sponsored tax credits, inexpensive land for Giga-Shanghai, and low-interest loans, as noted by The Street.

The preferential treatment of Tesla often exposes the company to Chinese social media fodder regardless of the nature of the news.

One can only wonder how Musk could pull off such an ideal situation for his company especially given the time frame. The deal was consummated during the Trump presidency when U.S.-Chinese relations were quite rocky. Some have speculated the government wanted to spur the growth of EV usage in a country with multiple cities of extraordinary smog conditions. What better way to do that than by luring an American high-profile EV automaker with a high-profile leader?
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories