Elon Musk’s Special Privileges in China: Balancing Business and Geopolitical Risks

Elon Musk, the CEO of Tesla, has been granted special privileges by the Chinese government to set up a plant in China. This news has sparked concerns among critics who believe that this relationship could leave Musk vulnerable to leverage from Beijing. The New York Times reported on Musk’s close ties with the Chinese government, which included concessions such as low-interest loans and changes in ownership rules to facilitate the setup of the plant in Shanghai in 2019.

Today, the China plant accounts for more than half of Tesla’s global deliveries, making the company increasingly reliant on the low production costs in China’s competitive electric vehicle market. While China has been building its own strong EV industry, Tesla is facing challenges. The close relationship between Musk and China has raised concerns among US lawmakers, particularly in light of his ownership of SpaceX, a satellite company with valuable Pentagon contracts.

Musk has been known to express pro-China views on controversial issues, such as Taiwan, and has praised the country’s leaders. Despite these allegations being raised in The New York Times, there has been no official comment from Tesla, SpaceX or Musk on this matter. Business Insider has reached out to these companies for comment.