Elon Musk unexpectedly visited Beijing on Sunday, where he met China’s second-ranking leader, Premier Li Qiang. Tesla is struggling with falling sales and data security issues in the world’s largest car market.
Musk arrived in Beijing on Sunday and met li. The electric vehicle maker’s CEO was looking to refocus Tesla on artificial-intelligence with a planned service called “robotaxi”.
China is Tesla’s second largest market, after the US. Sales have been declining this year, and Musk’s plans to increase Tesla’s appeal by introducing new autonomous driving features have been curtailed due to Chinese restrictions regarding the use of data from customers.
Li’s words were emollient at a moment when tensions have risen between Beijing and Washington, especially over technology.
The state media reported that Musk also said Tesla wished to intensify its cooperation with China, and praised the Shanghai facility as being its best-performing plant.
Musk wrote in a posting to his social media platform X: “It was an honor to meet Premier Li Qiang.” “We’ve known each other for many years now, dating back to early Shanghai days.”
Li was the Communist Party boss of Shanghai when Musk decided in 2018 to invest in this eastern Chinese city.
According to Chinese state-run media, the Tesla CEO also met Ren Hongbin. He is the chair of the China Council for the Promotion of International Trade.
Tesla didn’t immediately answer questions and no further details were available.
The visit was made just a few days after Musk cancelled his trip to India where he was expected to meet with Prime Minister NarendraModi as the group investigated beginning production in India.
Tesla’s stock price has dropped by nearly a third in 2024 as it lost market share to rivals in China – the world’s largest car market in terms of units. It is also struggling with a global growth slowdown of EVs, which has forced it into cutting thousands of jobs.
According to Automobility, a Shanghai-based consultancy, the group’s Chinese sales dropped 4 percent year on year to 132,420 vehicles in the first three months of this year, while total production for new energy vehicles, which includes hybrids, rose by 32 percent.
According to the figures, Tesla’s share of the local EV market is only 7.5%, a far cry from the 33.5% that BYD (the Chinese EV maker backed by Warren Buffett) has achieved.
Musk promised to launch “more affordable” models sooner than planned, and this contributed to the worse-than-expected drop in profits in the first quarter.
In a recent earnings call, he stated that Tesla hopes to get regulatory approval in China for the development of more autonomous driving features.
The group’s ambitions of rolling out more advanced autonomous technology in China have been complicated by the requirement to store local data to improve their systems, which were developed largely in the US.
Tesla’s data gathering has been a source of concern for the powerful Cyber Administration of China in the past.
Tesla’s largest market outside of the US is China, the second-largest economy in the world. It’s also a key part of its supply chain.
Musk’s decision, to build a multi-billion dollar gigafactory facility in Shanghai, is credited for helping to propel the rapid growth of China’s EV Industry.
Tesla’s recent market share loss in China comes after the company decided to cut prices in China by late 2022 , causing a price war which has fueled intense competition on the domestic automarket. The group also releases new models slower than its competitors.
Musk faces new competition in the form of Chinese tech groups like Huawei and Xiaomi . These companies are increasing their bets on electric vehicles.
Analysts also warn that Musk’s Chinese business could be exposed to geopolitical reprisals from Beijing’s security-hawks.
X, Musk’s social media platform formerly called Twitter, has been banned in China. Officials also expressed concern about links between SpaceX and Musk’s rocket and satellite company, the US military.