Beijing, China – Tesla CEO Elon Musk made an unexpected visit to Beijing on Sunday to meet with Premier Li Qiang as the electric car company faces challenges including declining sales and data security concerns in the Chinese market.
Musk arrived in the Chinese capital on Sunday afternoon and held meetings with Li as well as Ren Hongbin, chair of the China Council for the Promotion of International Trade. According to Chinese state media, Li praised Tesla’s business in China as a successful model of economic and trade cooperation with the United States, highlighting their partnership since Musk’s decision to invest in Shanghai in 2018.
The purpose of the meetings and the outcome were not disclosed, and Tesla did not provide immediate responses to inquiries. The visit occurred shortly after Musk canceled a trip to India where he was expected to meet with Prime Minister Narendra Modi as Tesla explores the possibility of starting production in the country.
Tesla’s stock has dropped nearly a third in 2023, attributed in part to losing market share in China to local competitors and facing a global slowdown in electric vehicle sales growth that led to significant job cuts within the company.
Despite a 4% decline in Chinese sales in the first quarter of the year, Tesla continues to navigate the market against local rivals, with a 7.5% share of the new energy vehicle sector compared to BYD’s 33%. Musk has plans to launch more affordable models and seek regulatory approvals for autonomous driving capabilities in China, aiming to expand the use of Tesla’s vehicles globally.
However, Tesla’s efforts to introduce advanced self-driving technology in China face challenges due to local data storage requirements imposed by the Cyber Administration of China. The country is Tesla’s largest market outside the US, and Musk’s decision to establish a gigafactory in Shanghai has contributed significantly to the growth of China’s electric vehicle industry.
In addition to traditional rivals like BYD, Chinese tech companies such as Huawei and Xiaomi are increasingly venturing into the electric vehicle market, posing new competition for Tesla. Analysts also caution about potential geopolitical risks for Tesla in China, particularly related to concerns about Musk’s other ventures, such as his commercial space exploration company SpaceX, and ties to the US military.