Tesla reportedly plans to increase its investment in the Chinese market despite the ongoing trade war between China and the United States. According to one Chinese business professor, “Tesla can’t leave China. Otherwise, it will definitely die.”
The Global Times, which is the state-run newspaper of the Chinese government, reports that Elon Musk’s Tesla plans to increase its investment in the Chinese market despite the ongoing China-U.S. trade war. In a press release sent to the Global Times, Tesla stated: “Now China has become our largest single market besides North America, the automobile industry is undergoing a huge change which only happens once in a hundred years, and China — the fastest-growing economy in the world — is taking the lead.”
It appears that China’s demand for electric cars is driving Tesla’s continued investment in the Chinese market. Recent data from the China Association of Automobile Manufacturers claims that sales of new energy vehicles (NEVs) was up by 20.8 percent year-on-year to 872,000 from January to September.
Cong Yi, a professor at the Tianjin University of Finance and Economics, commented on Tesla’s situation stating: “Tesla can’t leave China. Otherwise, it will definitely die. Multinational companies from developed economies including the US and the EU have relied on China to a large extent in the industry chain. They can’t afford to leave the largest and most promising market in the world.”
Bloomberg recently reported that Tesla’s Shanghai factory could “make or break” CEO Elon Musk’s vision. The outlet reported:
Elon Musk said he’s never seen a factory built so quickly, and now he’s about find out if it’s up to the task.
Tesla Inc.’s new Shanghai Gigafactory, which only broke ground in January, is weeks from starting mass production of electric sedans. China’s first plant wholly owned by a foreign carmaker — and Tesla’s first outside the U.S. — is a crucial test of Musk’s bid to keep his carmaker profitable as he bets big on the world’s largest market for electric vehicles.
Musk has predicted Tesla will make at least 1,000 cars a week in Shanghai by the end of the year — a volume the company’s original factory in California spent months trying to hit — and has said a weekly rate of 3,000 is a target at some point.
Tesla Chairman Robyn Denholm claimed recently that the firm was working with local authorities to obtain a manufacturing license which it hopes to receive by the end of the year. “We’re working with the local government to get our manufacturing certification, which we hope we will be able to get by the end of the year,” Denholm said. Whether Tesla will manage to actually produce vehicles from the factory before the end of the year remains to be seen.