Tesla CEO Granted Special Privileges in China, But Critics Warn of Vulnerability to Beijing’s Leverage

Elon Musk’s Vulnerability Exposed by China’s Favors: New York Times

During a recent visit to Shanghai, Tesla CEO Elon Musk was granted special privileges by the Chinese government to establish a Tesla plant in the country. However, critics argue that this move may leave him vulnerable to leverage from Beijing. The close relationship between Musk and China’s government has been described by former Tesla employees, diplomats, and policymakers, with concessions offered by the Chinese government to facilitate the construction of the Tesla plant in Shanghai starting in 2019.

As a result of these perks, including low-interest loans, a new emissions credit policy that benefited Tesla, and changes to ownership rules that allowed Tesla to set up without a domestic partner, the Shanghai plant now accounts for over half of Tesla’s global deliveries. This has made the company increasingly reliant on low production costs in China in an increasingly competitive electric vehicle market.

However, as China builds its own strong EV industry, Tesla finds itself facing challenges in the market. Concerns have been raised by US lawmakers regarding Musk’s dependency on China, especially considering his ownership of SpaceX, a satellite company with valuable Pentagon contracts. Musk has emphasized that his companies are separate entities but has shown support for China on various issues including Taiwan.

Tesla, SpaceX and Musk have not provided any comment to The New York Times or Business Insider regarding this matter.

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