\nElon Musk\u2019s pivotal China visit: Diplomacy, supply chain and beyond<\/br>
\n2023-05-31 22:23:13<\/br><\/p>\n
Amid decoupling, the Tesla CEO is one of the few American tech bosses who remain committed to China<\/h2>\n\n\t\t\t![](\"https:\/\/i0.wp.com\/techcrunch.com\/wp-content\/uploads\/2022\/06\/Tesla-China-GettyImages.jpeg?w=1140&ssl=1\")
\n\t\t<\/div>\n<\/p><\/div>\n\nOn Tuesday, Elon<\/span> Musk commenced his high-stakes visit to China, marking his first since before the COVID-19 pandemic. In an era of decoupling, the Tesla CEO stands out as one of the very few Silicon Valley tech bosses who remain committed to China.<\/p>\nThis commitment isn\u2019t surprising, given the increasingly pivotal role China plays in Tesla\u2019s ever-expanding electric vehicle empire. In Q1<\/a>, the country accounted for more than half of the carmaker\u2019s deliveries, partly thanks to its competitive pricing strategy. Musk is also unabashed about his support for China\u2019s demanding work culture<\/a>\u00a0even as the rigorous \u201c996\u201d schedule has drawn fire<\/a> from the country\u2019s tech workers in recent years.<\/p>\nChinese people have reciprocated Musk\u2019s affinity. With\u00a0over two million followers on Weibo<\/a>, the country\u2019s answer to Twitter, Musk shares his thoughts and admiration for China, earning him the endearing nickname \u201cIron Man.\u201d His popularity extends to a man from eastern China who became an overnight sensation<\/a> due to his striking resemblance to the billionaire.<\/p>\nMusk\u2019s visit to China holds the potential to strengthen Tesla\u2019s ties with the world\u2019s largest auto market. As he busies himself with meeting high-ranking Chinese officials and core partners, we are compiling a rundown of Musk\u2019s activities in China and their implications for Tesla\u2019s future strategy for the country. The list will be continuously updated throughout his trip.<\/span><\/p>\nBilateral relations<\/h2>\n
Bilateral relations took center stage on Musk\u2019s first day in China, as he received a warm welcome from China\u2019s foreign minister Qin Gang. The gesture indicates that Beijing attaches great importance to Musk\u2019s visit, seeing it as an opportunity to send Washington a message amidst strained diplomatic relations.<\/p>\n
While Qin stressed that China\u2019s development is an opportunity for the world, Musk echoed this sentiment, stating that Tesla opposes decoupling or cutting off supply chains and is ready to expand business in China and share in China\u2019s development opportunities, tweeted the nation\u2019s foreign ministry spokesperson Hua Chunying. Musk here seems to be reassuring foreign firms affected by the escalating tensions between the U.S. and China that the gate of the Middle Kingdom is still open.<\/p>\n
\n\nState Councillor and Foreign Minister Qin Gang met @elonmusk<\/a> earlier today. Qin emphasized that China\u2019s development is an opportunity for the world. pic.twitter.com\/j23hHNbNCi<\/a><\/p>\n\u2014 Hua Chunying \u534e\u6625\u83b9 (@SpokespersonCHN) May 30, 2023<\/a><\/p>\n<\/blockquote>\n<\/div>\nIt\u2019s worth noting that Musk has refrained from tweeting since his private jet reportedly<\/a> landed in Beijing on Tuesday morning. This departure from his usual prolific tweeting is expected since Twitter is banned in China; he\u2019d be publicly violating Chinese laws by circumventing the Great Firewall that blocks it. Knowing this trip\u2019s objective is to facilitate important deals, Musk probably wants to avoid any controversy.<\/p>\nWhile Musk may not be active on Twitter publicly, he took to Weibo to sing a little praise for China. \u201cThe China space program is far more advanced than most people realize,\u201d he wrote<\/a>.<\/p>\nThe comment is intriguing not least because SpaceX, Musk\u2019s own company, is aiding U.S. efforts in putting astronauts back near the lunar surface by 2025<\/a>. Outer space has become a significant arena for U.S.-China competition, with both nations intensifying investments in space programs. As evidence, China announced<\/a> its plans on Monday to send astronauts to the moon before 2030.<\/p>\nBattery security<\/h2>\n
On the first night of his trip, Musk chose to dine with an essential supply chain partner. He met Zeng Yuqun, chairman of Contemporary Amperex Technology Co. Limited, according to Reuters<\/a>.<\/p>\nCATL, the world\u2019s biggest battery manufacturer, ranks among Tesla\u2019s top three battery suppliers alongside LG and Panasonic. Since 2020<\/a>, Tesla has been using CATL batteries in its vehicles made in China and soon became the battery maker\u2019s biggest customer.<\/p>\nBatteries are the heart of electric vehicles, profoundly impacting a car\u2019s overall energy efficiency and cost. Securing a stable battery supply is thus vital to ensure smooth production, prompting EV makers to forge close relationships with their battery partners.<\/p>\n
Despite their close ties, Tesla is somehow not included in the list of EV makers participating in CATL\u2019s aggressive price-cut scheme. According to Chinese media outlet 36kr<\/a>, CATL is offering ce customers the option to buy lithium carbonate, a key material of lithium-iron-phosphate batteries, which dominate the EV market in China, for a set price of 200,000 yuan ($28,140) per ton. That\u2019s a very competitive offer compared to the market price, which peaked<\/a> at around 550,000 yuan per ton in November.<\/p>\nThere\u2019s a catch though. Nio, Geely\u2019s Zeekr, Huawei and other carmakers opting into the program will need to source 80% of their batteries from CATL. However, Tesla seems to be taking a different approach by venturing into battery manufacturing<\/a> and lithium mining<\/a>. This move aims to enhance Tesla\u2019s supply chain control, suggesting that it will not want to rely solely on a single supplier.<\/p>\nThere could be other topics of discussion between the two. Tesla currently sources battery-grade lithium from suppliers including, China\u2019s Ganfeng Lithium, but CATL is also making strides into the mining sector as it snatches up resources worldwide<\/a>, even outbidding Ganfeng for a major miner. It remains to be seen how this partnership between Tesla and CATL will develop in the future.<\/p>\n
\n\t\t<\/div>\n<\/p><\/div>\nOn Tuesday, Elon<\/span> Musk commenced his high-stakes visit to China, marking his first since before the COVID-19 pandemic. In an era of decoupling, the Tesla CEO stands out as one of the very few Silicon Valley tech bosses who remain committed to China.<\/p>\n This commitment isn\u2019t surprising, given the increasingly pivotal role China plays in Tesla\u2019s ever-expanding electric vehicle empire. In Q1<\/a>, the country accounted for more than half of the carmaker\u2019s deliveries, partly thanks to its competitive pricing strategy. Musk is also unabashed about his support for China\u2019s demanding work culture<\/a>\u00a0even as the rigorous \u201c996\u201d schedule has drawn fire<\/a> from the country\u2019s tech workers in recent years.<\/p>\n Chinese people have reciprocated Musk\u2019s affinity. With\u00a0over two million followers on Weibo<\/a>, the country\u2019s answer to Twitter, Musk shares his thoughts and admiration for China, earning him the endearing nickname \u201cIron Man.\u201d His popularity extends to a man from eastern China who became an overnight sensation<\/a> due to his striking resemblance to the billionaire.<\/p>\n Musk\u2019s visit to China holds the potential to strengthen Tesla\u2019s ties with the world\u2019s largest auto market. As he busies himself with meeting high-ranking Chinese officials and core partners, we are compiling a rundown of Musk\u2019s activities in China and their implications for Tesla\u2019s future strategy for the country. The list will be continuously updated throughout his trip.<\/span><\/p>\n Bilateral relations took center stage on Musk\u2019s first day in China, as he received a warm welcome from China\u2019s foreign minister Qin Gang. The gesture indicates that Beijing attaches great importance to Musk\u2019s visit, seeing it as an opportunity to send Washington a message amidst strained diplomatic relations.<\/p>\n While Qin stressed that China\u2019s development is an opportunity for the world, Musk echoed this sentiment, stating that Tesla opposes decoupling or cutting off supply chains and is ready to expand business in China and share in China\u2019s development opportunities, tweeted the nation\u2019s foreign ministry spokesperson Hua Chunying. Musk here seems to be reassuring foreign firms affected by the escalating tensions between the U.S. and China that the gate of the Middle Kingdom is still open.<\/p>\n State Councillor and Foreign Minister Qin Gang met @elonmusk<\/a> earlier today. Qin emphasized that China\u2019s development is an opportunity for the world. pic.twitter.com\/j23hHNbNCi<\/a><\/p>\n \u2014 Hua Chunying \u534e\u6625\u83b9 (@SpokespersonCHN) May 30, 2023<\/a><\/p>\n<\/blockquote>\n<\/div>\n It\u2019s worth noting that Musk has refrained from tweeting since his private jet reportedly<\/a> landed in Beijing on Tuesday morning. This departure from his usual prolific tweeting is expected since Twitter is banned in China; he\u2019d be publicly violating Chinese laws by circumventing the Great Firewall that blocks it. Knowing this trip\u2019s objective is to facilitate important deals, Musk probably wants to avoid any controversy.<\/p>\n While Musk may not be active on Twitter publicly, he took to Weibo to sing a little praise for China. \u201cThe China space program is far more advanced than most people realize,\u201d he wrote<\/a>.<\/p>\n The comment is intriguing not least because SpaceX, Musk\u2019s own company, is aiding U.S. efforts in putting astronauts back near the lunar surface by 2025<\/a>. Outer space has become a significant arena for U.S.-China competition, with both nations intensifying investments in space programs. As evidence, China announced<\/a> its plans on Monday to send astronauts to the moon before 2030.<\/p>\n On the first night of his trip, Musk chose to dine with an essential supply chain partner. He met Zeng Yuqun, chairman of Contemporary Amperex Technology Co. Limited, according to Reuters<\/a>.<\/p>\n CATL, the world\u2019s biggest battery manufacturer, ranks among Tesla\u2019s top three battery suppliers alongside LG and Panasonic. Since 2020<\/a>, Tesla has been using CATL batteries in its vehicles made in China and soon became the battery maker\u2019s biggest customer.<\/p>\n Batteries are the heart of electric vehicles, profoundly impacting a car\u2019s overall energy efficiency and cost. Securing a stable battery supply is thus vital to ensure smooth production, prompting EV makers to forge close relationships with their battery partners.<\/p>\n Despite their close ties, Tesla is somehow not included in the list of EV makers participating in CATL\u2019s aggressive price-cut scheme. According to Chinese media outlet 36kr<\/a>, CATL is offering ce customers the option to buy lithium carbonate, a key material of lithium-iron-phosphate batteries, which dominate the EV market in China, for a set price of 200,000 yuan ($28,140) per ton. That\u2019s a very competitive offer compared to the market price, which peaked<\/a> at around 550,000 yuan per ton in November.<\/p>\n There\u2019s a catch though. Nio, Geely\u2019s Zeekr, Huawei and other carmakers opting into the program will need to source 80% of their batteries from CATL. However, Tesla seems to be taking a different approach by venturing into battery manufacturing<\/a> and lithium mining<\/a>. This move aims to enhance Tesla\u2019s supply chain control, suggesting that it will not want to rely solely on a single supplier.<\/p>\n There could be other topics of discussion between the two. Tesla currently sources battery-grade lithium from suppliers including, China\u2019s Ganfeng Lithium, but CATL is also making strides into the mining sector as it snatches up resources worldwide<\/a>, even outbidding Ganfeng for a major miner. It remains to be seen how this partnership between Tesla and CATL will develop in the future.<\/p>\nBilateral relations<\/h2>\n
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Battery security<\/h2>\n