Chính phủ ‘bẻ cong’ quy định, cho vay gần như không lãi suất để chiều lòng Tesla, mối quan hệ ‘bất thường’ khiến Mỹ phải ‘để mắt’

The relationship between Tesla and the Chinese government has always been unique and somewhat contentious. It’s a tale of a billionaire entrepreneur, Elon Musk, who took a gamble on China and its potential to provide cheap parts and talented labor for his electric vehicle company. This move was seen as a strategic opportunity for the fledgling electric car industry, and it proved to be fruitful. However, as Tesla faces increasing challenges and loses some of its advantage against local competitors, its close ties with Beijing have become a cause for concern, especially for US policymakers.

Tesla’s Strategic Move into China

In 2020, Tesla introduced its first car manufactured in Shanghai, and Elon Musk was ecstatic. The decision to bet on China, a country known for its cheap parts and skilled workforce, was the perfect foundation for the nascent electric car industry at the time. For Chinese leaders, having a Tesla factory in the country was a significant achievement. The factory became Tesla’s flagship production facility, contributing to over half of the company’s global deliveries and generating most of its profits.

Initially, it seemed that Elon Musk had the upper hand and received many concessions from China. However, as Tesla faces increasing difficulties and loses ground to well-established competitors, its once-close relationship with Beijing has become a binding tie that US policymakers want to closely monitor.

A Special Financial Relationship

Interviews with former Tesla employees reveal that Musk enjoyed an extraordinary symbiotic relationship with Beijing, reaping the benefits of China’s generosity while still receiving subsidies from the US. A decision made by the Chinese government in 2020 to change important national emission regulations directly benefited Tesla, resulting in estimated profits in the hundreds of millions of dollars during that lucrative period.

Moreover, Elon Musk gained access to several high-ranking officials. The rapid development of the Shanghai factory, accomplished without any local partners, was unprecedented for a foreign automaker in China.

However, as Chinese President Xi Jinping aimed to turn the country into an automotive powerhouse, domestic automakers such as BYD and SAIC began to accelerate their efforts, even threatening long-established manufacturers like Volkswagen, Renault, and Stellantis. Tesla was not immune to these effects. According to The New York Times, Elon Musk heavily relies on China’s market and low-cost supply chain, making it challenging for either party to extricate themselves from one another.

Generous Financial Support

Under the supervision of Li Qiang, the state-owned bank provided Tesla with over 11 billion Chinese yuan (approximately $1.5 billion) in low-interest loans. This agreement was so generous that a senior executive from the automotive industry expressed astonishment, stating that Shanghai authorities were doing the unimaginable by providing substantial investments to Tesla almost for free.

Furthermore, 95% of the components used in the Shanghai factory have local origins, with Tesla primarily employing CATL batteries instead of partnering with Panasonic as it does in the US. This significant localization of production has reduced construction costs in Shanghai by about 65%. Musk hailed this facility as a “template for growth in the future.”

However, expectations come with responsibilities. Chinese workers are accustomed to long working hours, which Musk sees as an advantage. They work four shifts of 12 hours each, followed by two days of rest before transitioning to four night shifts of 12 hours each.

During the factory’s closure in 2022, some Tesla workers had to sleep on the factory floor. The harsh working conditions have made Musk a subject of discussion when it comes to labor practices.

The Watchful Eye of the US and the EU

In September, the European Union launched an investigation into whether China’s policies provided unfair advantages to electric vehicle brands. While Tesla was not investigated on technical grounds, it could still face new tariffs.

In the US, the Biden administration has been pushing for the Inflation Reduction Act as an effort to increase competitiveness. The White House is also considering raising tariffs on Chinese electric vehicles, which are currently at 25%.

Despite facing increasingly fierce competition from well-established rivals, Elon Musk remains undaunted. In April 2023, he announced plans to build a new factory in Shanghai dedicated to producing Megapack batteries, which are lithium-ion batteries used for energy storage.

According to Tesla, the new factory is expected to start production in the second quarter of 2024. Initially, it will produce 10,000 Megapack batteries per year, equivalent to a storage capacity of up to 40 GWh. These products will be sold worldwide.

This move demonstrates Elon Musk’s determination to develop the battery and solar energy sectors on a scale equivalent to the electric vehicle market, which is Tesla’s main source of revenue. Tesla already has a Megapack battery production facility in Lathrop, California, with an annual production capacity of 10,000 batteries.

Tesla’s Impact on China’s Electric Vehicle Market

China is the world’s most important electric vehicle market, and a significant portion of that is thanks to Elon Musk and his company, Tesla. He revived a dormant market, as the allure of Tesla vehicles prompted many consumers to switch from traditional gasoline-powered cars to electric ones.

Bill Russo, founder and CEO of Automobility, an investment and strategy consulting firm based in Shanghai, said, “If you’re in China, thank Tesla for reawakening a dormant segment of the retail consumer market.”

Tesla’s benefits for China can also be seen in its supply chain. The company claims that production in Shanghai is 95% localized, and many Chinese electric vehicle manufacturers prefer to source their supplies from Tesla’s suppliers. CATL, the world’s largest electric vehicle battery manufacturer, depends on Tesla for 12% of its revenue. Ningbo Xusheng Auto Technology, a supplier of aluminum shells for batteries and electric drive systems, considers Tesla its largest customer in nearly a decade.

Many Chinese automakers have learned from Tesla’s manufacturing expertise. For example, Tesla’s technique of casting the entire car frame, which reduces weight, costs, and assembly time, has been adopted by Chinese EV manufacturers like NIO and XPeng. NIO even sources its car frames from Tesla’s supplier, Wencan Group.

In conclusion, Tesla’s close relationship with the Chinese government has proven to be both advantageous and contentious. While it has provided the company with financial support, affordable supply chains, and a foothold in the world’s largest electric vehicle market, it has also raised concerns among US policymakers. As Tesla continues to navigate the fierce competition in China and faces scrutiny at home, its future in this complex and ever-changing landscape remains uncertain.

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