China foreign minister meets with Elon Musk in Beijing - PingWest

China foreign minister meets with Elon Musk in Beijing

China foreign minister meets with Elon Musk in Beijing

3 hours ago

Chinese State Councilor and Foreign Minister Qin Gang met with Tesla CEO Elon Musk on Tuesday in Beijing, Xinhua reported.

During the dialogue, Qin said Chinese modernization will create unprecedented growth potential and market demand. In particular, he pointed out that China's new-energy vehicle industry has broad prospects.

China will continue to advance opening-up at a high level and create a better market-oriented, law-based, and international business environment for Tesla and other foreign companies, said Qin. 

Musk, on his part, acknowledged the intertwined and inseparable interests shared by the US and China. He said that Tesla opposes decoupling and is willing to continue to expand its business in China and share the country's development opportunities.

The US electric vehicle (EV) giant's first major footprint in China is marked by its Shanghai Gigafactory, which was constructed in record time. The factory was announced in July 2018, and by December 2019, it began rolling out its first vehicles - a remarkable accomplishment that underscored both China's speed and Tesla's ambitious expansion plans.

As per industry data and company filings, more than 50% of Tesla's global EV deliveries last year were produced in China. The Chinese market also accounted for around 22% of the company's total revenue, with nearly 440,000 EVs sold in the country.

Despite escalating frictions between the US and China within the tech realm, Tesla's commitment to the global manufacturing powerhouse remains unshaken. In April, the giant announced plans to establish a second factory in Shanghai, focused on manufacturing its Megapack energy storage product.

Tesla has greatly benefited from China's extensive and efficient supply chain, spanning from battery production, component manufacturing, to vehicle assembly, and beyond. Yet, the company now finds itself facing increasingly fierce competition from local rivals.

With the maturation of the Chinese car market, competitors like BYD are emerging as formidable rival by offering a variety of EVs that rival Tesla's offerings, but at more affordable prices. The competitive pressure is evidenced by Tesla's shrinking market share in China, which, according to data from the China Passenger Car Association, fell significantly from around 15% in 2020 to just 10% last year.