Elon Musk has ‘freed the bird’, but has he slipped into China’s cage?

New Delhi: While Elon Musk has touted his acquisition of Twitter as “freeing the bird”, as the freeing of speech and expression, ironically he seems to be cozying up to China too at the same time. All of this, according to reports, is to push up Tesla’s business in China.

Musk getting mushy with China

There has been rising demand for clean cars and to cater to this, the competition among automakers has become fierce in China.

Notably, three US-listed EV makers, Nio Inc., Li Auto Inc., and Xpeng Inc. have ceded ground to BYD and Elon Musk owned Tesla in China.

Last month, Tesla cut prices across its line-up in China, partly reversing several increases earlier this year, as Musk’s EV pioneer seeks to increase sales after is Shanghai factory doubled annual production capacity to about 1 million cars.

These developments come months after Musk was seen getting pally with China’s ambassador to the United States, Qin Gang, even as the American business tycoon remains critical of the country’s president Joe Biden.

The meeting between Musk and Gang held great symbolism, since it highlighted that in sharp contrast to Musk’s critique of the US, he was in good terms with of the country’s biggest business rivals – China.

For many in Washington, this proximity between Musk and China is a cause of concern since the two countries have become stark competitions in tech-rich industries such as electric vehicles.

Musk’s fondness for china to increase business prospect

However, one has to realise that Musk‘s growing fondness for China is also to further his own business aspirations as its future relies as much on China as it does on its home country.

Furthermore, with Musk’s acquisition of Twitter, critics now fear that he will be compromised by his China business and go soft on Beijing’s abuse of social media platforms to bully opponents and spread misinformation.

But Musk is not a unique case; many American executives still view China as a strategic necessity, with the lure of its 1.4 billion market a potent concern that could lead to geopolitical concerns.

China welcoming Tesla is a strategic move

While so far, Musk’s good relations with the Chinese government has made for good business, with Tesla becoming the first foreign automaker to strike a deal with them to open a manufacturing operation in China without a Chinese partner in 2018. One has to realise that the Chinese government has not welcomes Tesla out of some spirit of a more cordial US- China collaboration. The country has supported the American businessman’s enterprise because China needs him as much as he needs the country.

But, China still requires American technology, expertise, and capital to help topple US as the world’s premier superpower – feat Tesla helps achieving. China leadership also wants to make Tesla another international business dependent on China market.

Michael Dunne, the chief executive officer of the consultancy ZoZoGo and a former president of General Motors in Indonesia told the publication that what China saw and hoped for was that Tesla would be a catalyst for a mammoth shift in people’s perception of electric vehicles in China, and that hope was realised.

China says will let Tesla build out Gigafactories

Amid all this, the US-China relations are souring, leading to risks of investing in the country. Recently US banks pledged to pull out of China if ordered by Washington because of Chinese attack in Taiwan. While Musk does not seem overly worried at the moment, Kyle Bass, the founder of the investment firm Hayman Capital Management says that China is going to let Tesla build out Gigafactories, figure out how Musk does it and then take advantage.

Tesla announces new China subsidy

A November insurance subsidy worth 8,000 yuan has been announced by Tesla for people buying its EVs in inventory. This comes amid the company’s forecast of increase in orders.

In December, the subsidy will be reduced to 4,000 yuan.

In September, Tesla introduced a 7,000 yuan insurance subsidy on all vehicles after wait times for its EVs fell essentially to zero.

On 24 October, Tesla cut actual Model 3 and Model Y prices in China by as much as 9 per cent. After the October price cuts, Tesla, for a brief period of time, eliminated the insurance subsidy it had implemented in September before reviving it on 8 October.

Tesla vehicles sold in China

Tesla, in October, delivered 71,704 vehicles from its recently upgraded plant in Shanghai. The vehicle sale was up 32 per cent as against a year earlier, but down nearly 14 per cent from the record 83,135 in September.

In October, Tesla exported a record 54,504 vehicles from the Shanghai plant and sold 17,200 in China.

The EV giant reported Q3 deliveries of 343,830 cars, up 42 per cent during the same period last year and above Q1’s record 310,048.

Elon Musk’s net worth falls below $200 billion

Elon Musk has sold 9.5 million Tesla share worth nearly $4 billion over almost a week after he closed his $44 billion Twitter acquisition, as per US Securities and Exchange Commission filings.

Notably, this year alone, Musk has dumped nearly $20 billion in Tesla share.

It seems that Twitter is grabbing maximum of Musk’s attention and it is evident from the action of the concerned Tesla Inc. shareholders who sold their shares, bringing the billionaire’s net worth below $200 billion.

Forbes estimates that Musk’s current net worth is $194.8 billion, with a significant portion of it coming from his about 15 per cent ownership in Tesla, which has a market value of $622 billion.

Is Twitter taking up more of Elon Musk’s attention?

Tesla CEO Musk was quite active on Twitter till last month. However, lately, it appears that he isn’t actively tweeting at light speed as he used to do before acquiring the social media giant. Most of his tweets, especially replies, are restricted to single emojis or one word.

Also, he has not tweeted much about Tesla since he purchased Twitter on 27 October, 2022 after months of back-and forth between him and the microblogging site.

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