Musk's urgent visit to China to visit high-level executives, what signal does it send?

Chief Business Review

2024-04-29 20:40Posted on the official account of Shanghai Chief Business Review

Hello everyone, I'm Wei Ming from Chief Business Review.

Musk's private jet Gulfstream G550 arrived at Beijing Capital International Airport at 14 pm on April 28, and this visit did not come much together, and some people said that it was a "surprise visit".

Musk himself did not say in advance that he would come to China on his X account, but late at night on the 28th, he posted that he was very honored to visit the top level of the Chinese government, and mentioned that he and Mr. Prime Minister had known each other in Shanghai earlier, and they have been many years now.

Why did Musk suddenly visit China? CCTV said that he came at the invitation of the China Council for the Promotion of International Trade. Some people also say to go to the Beijing Auto Show to see China's new energy vehicles, but Tesla did not participate in the Beijing Auto Show, combined with the current information, we think there may be several reasons.

01

Autonomous driving

According to media reports, Musk's visit to China may discuss with the Chinese government the possibility of Tesla's Full Self-Driving (FSD) software landing in China. Autonomous driving technology is the key to the future of the automotive industry, and China, as one of the world's largest automotive markets, is a pivotal position for any automaker. Musk's trip may be to promote the legalization and commercialization of FSD technology in China, so as to take the lead in the global autonomous driving field. This is undoubtedly a very important strategic layout for Tesla.

This is also the main reason why it is believed on the Internet. Intelligent driving as the core technology of the future smart car, has long been a lot of our car companies to spend a lot of money to cultivate the golden egg, Huawei, Xiaopeng and other new power car companies have also been equipped on a variety of models, so that FSD landing also means that the general recognition of intelligent driving technology, will also promote intelligent driving more about the right of way, the legal details of the landing, and at the same time let the ready domestic car companies and Tesla directly compete, and Tesla's FSD as a catfish, so that the entire market is more dynamic and competitive.

02

About Tesla's adoption of compliance requirements in the Chinese market

After Tesla's volume price cut in January 2023, the entire new energy vehicle market began a year-long price reduction promotion tide, and now this trend is becoming more and more fierce, and the industry competition is also extremely fierce, and Tesla's sales not only did not continue to grow rapidly, but lagged behind BYD, although Tesla's sales in China are still relatively stable, but with the strong production capacity of China's manufacturing industry and the ability to roll prices, Tesla's future position in China is not very good. As an aside, Apple has given up on building cars.

However, Tesla still has its hopes in the Chinese market, so it should take this opportunity to seek more policy support and market access. On April 28, the China Automobile Association officially issued the "Notice on the Testing of 4 Safety Requirements for Automotive Data Processing (the First Batch)", in which 76 models from 6 companies, including BYD, Ideal, Lotus, Hezhong New Energy (Nezha Automobile), Tesla, and Weilai, meet the 4 compliance requirements of automotive data security.

It is reported that the above-mentioned intelligent networked vehicle data security compliance mainly detects four aspects, including anonymization of face information outside the car, no collection of cockpit data by default, in-vehicle processing of cockpit data, and significant notification of personal information processing. In addition, Tesla has built Tesla's Shanghai data center in 2021 to achieve localized data storage. Tesla has also introduced a third-party authority to audit the company's information security management system and passed the security management system certification (ISO27001). These security tests are actually voluntary, and if passed, they can address most concerns about user privacy and national security.

In terms of specific models, Tesla's domestically produced Model 3 and Model Y both meet automotive data security compliance requirements, and are the only foreign-funded enterprises that meet compliance requirements. Tesla said that various localities have successively lifted the ban on driving and parking restrictions on intelligent networked vehicles such as Tesla.

In fact, friends who pay attention to Tesla should know that in the past, all places, especially the parking rules of the party and government organs, have always been more sensitive to Tesla cars, although there is no clear rule that you can't park Tesla, you can't buy Tesla, but it has always been discouraged. I have also heard that some state-owned enterprises require Tesla not to park in the parking lot inside the enterprise, but only in the parking lot outside, which will definitely make some employees not consider buying Tesla.

So this time Tesla meets the compliance requirements, which will definitely be a great benefit to Tesla in the Chinese market, so that the restrictions on Tesla by local authorities are expected to be lifted, which will naturally stimulate a number of car purchases.

It is no wonder that Musk was so happy that he postponed his trip to India and immediately flew to Beijing.

03

Cybertruck

There is also a rumor I have heard about the Cybertruck, pickup trucks are actually limited sales conditions, and it is said that this time the Cybertruck has begun to apply for special vehicle licenses in some cities, especially in many shopping malls in Shanghai before, whether it can be opened to the general public in some areas in the future?

In addition, for Musk, the Cybertruck has both joy and worry, the good news is that the world can currently have more than 2 million reservations, but the production capacity is far from enough, unable to convert orders into actual sales, which is undoubtedly a major blow to Tesla's revenue and market value.

So where else in the world does this have the ability to help Musk complete these orders? Will Musk also take the opportunity to discuss the possibility during this trip?

04

Tesla's Shanghai factory expansion and energy storage plant

Musk's visit to China may involve the expansion of the Shanghai factory to meet the growing demand for production capacity. In addition to the Cybertruck mentioned above, the expansion of the Shanghai factory will help Tesla better respond to market changes and enhance its global competitiveness in the context of global supply chain tensions, especially Tesla's new models in the future.

In addition, Tesla previously announced that it would build a super energy storage factory in Shanghai to produce the ultra-large commercial energy storage battery Megapack. This move not only reflects Tesla's confidence in China's new energy market, but also is in line with China's national strategy to promote energy transition and achieve the goal of "carbon neutrality".

These plans need to be cooperated by China, and I believe that Musk is willing to show a good attitude of cooperation in order to win more opportunities.

A voiceover released by China outward

Then some friends may say that this is all good news for Musk, and of course he is willing to come over happily. How does this help our Chinese industry and national interests?

Just a few days ago, Blinken visited Shanghai and Beijing and met with the leaders of the country, and in the end we did not see us off, which shows that there is not much progress in the negotiations, and we do not like the American style of saying one thing and doing another.

In the current complex context of Sino-US relations, inviting Musk to visit China has a certain political symbolism, and it sends a positive signal to the world. It is not only a powerful response to the rhetoric of "decoupling and breaking the chain", but also shows the expectation and support of the US industry for China-US economic cooperation.

On the one hand, Musk's visit demonstrates his long-term confidence in China's economy, and will also promote exchanges and cooperation between China and the United States in the economic and trade fields, providing a positive impetus for the stability and development of bilateral relations.

In addition to Musk, do you dare to say that Nvidia's Jensen Huang doesn't want to do business with China?

Musk, as a top entrepreneur in the United States, and even his SpaceX, Starlink and the U.S. government are more or less inextricably linked, but Tesla is not only not subject to a direct expulsion order like Tiktok in China, Musk himself has not been discriminated against, Tesla China is also willing to put the data center in China, through compliance requirements, which represents our country's determination to open up to the outside world, and the attitude of welcoming excellent world companies to carry out legitimate business activities in China.

Compare the two, and make a judgment.

Of course, Musk, who has won the cheap and obedient Musk, his core interests are still in the United States, and he cannot give up, we still have to be sober on this point, but as long as he is in business and respects our country's sovereignty and laws and regulations, then this relationship can naturally last for a long time.

It's just that Tesla has let go of its hands in China, and this catfish will definitely make the market more active, and it will also intensify competition, and the competitive pressure of China's new car manufacturers will also be greater, but it may also be a good thing for technological innovation and user welfare.

What do you think? Welcome to the message area to discuss!

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Personal opinion, for reference only