Musk discusses development of intelligent connected vehicles with Chinese minister

Elon Musk thanked Chinese authorities for help Tesla’s Shanghai factory received during Covid, according to an official statement

A handout photo released by the Ministry of Foreign Affairs of the People's Republic of China shows Tesla CEO Elon Musk (L) shaking hands with China's Foreign Minister Qin Gang during a meeting in Beijing, China. EPA / CHINA'S FOREIGN MINISTRY HANDOUT HANDOUTShow less

Tesla’s Elon Musk met more government officials on the second day of his trip to China, having opened his first visit since before the pandemic by emphasising the importance of maintaining ties with the nation.

The billionaire met Jin Zhuanglong, China’s Minister for Industry and Information Technology, in Beijing on Wednesday.

The pair exchanged views on the development of new energy vehicles and intelligent connected vehicles, according to a statement from the ministry.

Photos on Chinese social media site Weibo also showed Mr Musk visiting China’s Ministry of Commerce, accompanied by Tom Zhu, Tesla’s senior vice president of automotive, and Grace Tao, Tesla’s vice president in charge of government and public affairs in Greater China.

According to a statement published by the ministry on its official website, Mr Musk, during his meeting with Minister of Commerce Wang Wentao, thanked authorities for the help Tesla’s Shanghai factory received during Covid and restated his confidence in China.

Mr Musk arrived on Tuesday in Beijing, where he met Foreign Minister Qin Gang. He is also expected to visit Tesla’s Shanghai factory during the trip.

In his meeting with Mr Qin, Mr Musk said the interests of China and the US are intertwined, according to a government statement. The release cited him as saying that Tesla opposes decoupling from China and is willing to keep expanding in the country.

The remarks are reminiscent of Mercedes-Benz Group AG’s Ola Kallenius telling the German newspaper Bild am Sonntag last month that unbundling from China is “an illusion”, and Apple’s Tim Cook emphasising the symbiotic nature of the iPhone maker’s relationship with the country during a visit in March.

Last last week, General Motors’ Mary Barra said China remains a key market for the company and that she was looking forward to continuing to develop clean cars with local partners.

The comments run counter to efforts by leaders including US President Joe Biden and German Chancellor Olaf Scholz to gain a geopolitical upper hand over Chinese President Xi Jinping by exerting greater influence over the trade of key components, including electric car batteries and semiconductors.

The US and Germany have offered state support for local manufacturing to help de-risk supply chains and wean the car industry off its heavy reliance on China for EV components.

The Tesla chief also met with the chief executive of battery company Contemporary Amperex Technology, Yuqun Zeng, on Tuesday, according to ArenaEV.

A picture of him with Mr Zeng walking through what looks like a hotel lobby circulated on social media. CATL declined to comment.

Bloomberg has previously reported Tesla is looking to build a battery plant in the US with CATL.

Tesla wants to pursue a deal similar to one that Ford Motor announced in February with CATL to construct a plant wholly owned by the US car maker.

Ford’s deal has provoked ire from members of Congress including Democratic Senator Joe Manchin of West Virginia and Republican Senator Marco Rubio of Florida, who argue that it allows the Chinese company to benefit from US subsidies.

Mr Musk is expected to visit Tesla’s Shanghai factory, people familiar with the matter said on Tuesday, asking not to be identified because the information is private.

He will potentially meet Premier Li Qiang to discuss automated-driving technology that Tesla is seeking to introduce in China, one of the people said.

Mr Musk and Mr Li, who used to be the party secretary for Shanghai, have met several times before. The city of Shanghai was instrumental in helping Mr Musk to quickly set up Tesla’s factory there.

Following a groundbreaking in early 2019, the company started delivering cars by December of that year.

The construction of Tesla’s plant in China’s financial heart was regarded as one of the most significant developments in the Shanghai business landscape during Mr Li’s tenure.

As then-Shanghai party chief, Mr Li met Mr Musk at a signing ceremony in 2018 committing to the factory construction, and Tesla become the first foreign car maker to enter China without a local partner.

Mr Li also was at the groundbreaking ceremony in January 2019 and again at a ceremony to mark the first deliveries of China-made Model 3s.

Tesla has enjoyed significant support from the Shanghai authorities, from access to cheap land to expedited planning approvals.

City officials even provided the EV maker with masks and protective equipment at the start of the pandemic. During the most recent lockdown, authorities helped Tesla secure an old military camp to house workers so it could restart production under a closed-loop system.

Tesla’s Shanghai plant accounted for more than half its global production in 2022, and the facility can now produce as many as 1.1 million cars a year.

In return, the US car maker contributed almost one quarter of Shanghai’s total automotive production value last year, and local authorities pledged earlier this month to continue to boost ties with the company through autonomous driving and robot modules.

On Tuesday, China’s Ministry of Foreign Affairs extended a welcome to Mr Musk.

“China welcomes Mr Musk and other leaders from the business community to have a better understanding of China and promote mutually beneficial co-operation,” spokeswoman Mao Ning said at a media briefing in Beijing.

But the relationship has not always been easy. After a red-carpet welcome to China, Tesla has weathered growing public resentment at times tension between Washington and Beijing is running high.

Angry Tesla owners swarmed showrooms in China in January to complain about missing out on a round of price cuts.

Tesla cars also were banned from Chinese military complexes and housing compounds in early 2021 over concerns about sensitive data being collected by cameras built into the vehicles.

An expansion of the Shanghai plant also was delayed, people familiar with the matter said in January, over other data concerns, in particular around a US company with connections to Mr Musk’s internet-from-space initiative Starlink having such a large presence in Asia’s biggest economy.