Elon Musk Needs China. China Needs Him. The Relationship Is Complicated. – WSJ

With the U.S. tightening technology exports to China in 2018, President Xi Jinping defiantly pledged to make China the world s future innovation and industrial center. Key to his plan was Elon Musk.

Mr. Xi viewed the South African-born entrepreneur as a technology utopian with no political allegiance to any country, according to officials involved in policy-making, and saw his Tesla Inc. as a spearhead that could make China a power in new-energy cars.

Mr. Xi rewrote the rulebook to allow foreign companies sole ownership of auto ventures so Mr. Musk would open an electric-vehicle factory in Shanghai. Authorities showered him with cheap land, low-interest loans and tax incentives, expecting in return that Tesla would groom local suppliers and bolster lagging Chinese electric-vehicle players, say people with knowledge of the talks between Beijing and the company.

Today Tesla likely makes more than half its vehicles in China, suggest calculations based on the company s third-quarter production and delivery figures and China Passenger Car Association data. Chinese sales helped propel Tesla to its first full year of profitability in 2020 and provided roughly a fourth of Tesla s revenue in the first nine months of 2021. Mr. Musk, meanwhile, has cemented his place as the world s wealthiest person.

via www.wsj.com