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Elon Musk’s Special Privileges in China: Is His Close Relationship with Beijing Putting His Business at Risk?

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

Elon Musk’s Special Privileges in China: Is His Close Relationship with Beijing Putting His Business at Risk?

In recent years, Tesla CEO Elon Musk has been granted special privileges by the Chinese government to set up a Tesla plant in the country. This move has sparked controversy among critics who argue that Musk may be vulnerable to leverage from Beijing due to his close relationship with China’s government.

Former Tesla employees, diplomats, and policymakers have described Musk’s close relationship with the Chinese government, which has resulted in concessions being made to facilitate the construction of the Tesla plant in Shanghai. Among these perks were 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. As a result of these incentives, the Shanghai plant now accounts for over half of Tesla’s global deliveries, making the company increasingly reliant on low production costs in China in a highly competitive electric vehicle market.

However, as China continues to build its own strong EV industry, Tesla is facing challenges in the market. US lawmakers have raised concerns about Musk’s dependency on China, especially considering his ownership of SpaceX, a satellite company with valuable Pentagon contracts. Despite this potential conflict of interest, Musk has emphasized that his companies are separate entities and he has shown support for China on various issues, including Taiwan.

Tesla, SpaceX, and Musk have not provided comment to The New York Times or Business Insider regarding this matter. However, it is clear that their close relationship with China’s government has had significant benefits for their businesses but also poses risks for their future success in a highly competitive industry.

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