Is Tesla on the Outs in China?

Zoë Schiffer: Can you talk to me about that relationship? And also, what is Tesla's standing like in China? Is it viewed as a popular, cool car still?

Zeyi Yang: It's still sort of, because for the longest time, Chinese auto brands have been seen as inferior to foreign brands. Tesla still has that halo as this American electric car company. But it's losing it as we speak. Also, when we talk about the relationship between Tesla and China, sometimes I forget how far back it dates. There's one very interesting figure we have to talk about. His name is Zhuanglong. He used to be Chinese minister of industry and information technologies. Basically, the chief ministry of innovations in China. He went to San Francisco in 2008 and tried one of the roadsters, one of the first electric cars that Tesla made. Because he came from the auto industry, he was an electric car nerd. That's how this all started. Then, from Musk's very first visit to China in 2014, he met this guy again. He really tried to push for it to sell his car in China, and later we know he built a Gigafactory in Shanghai in 2020. That's a long history of how Musk and Tesla entered China. But what we know for now is that China is one of the most productive facilities for Tesla. It's also one of the biggest market for Tesla. Tesla absolutely cannot lose China.

Zoë Schiffer: That's fascinating, because we know with other tech companies like Google and Meta, they tried really, really hard to get into China and weren't quite as successful, or completely failed in some cases. But Elon Musk was able to prevail. Do we know why that was?

Zeyi Yang: I think it helps that he's working on a car company instead of a social media company, because there's just so much control over information and the internet in China. Whereas if you're just making a car, it doesn't really go across those red lines that China has. Also, it just helps that China, for the last two decades, has really been thinking, “Maybe I should be betting on electric vehicle as the future of transportation too.” It did welcome Tesla to be a part of its grand experiment, and also investment to build up an EV empire. That's why Tesla become a very central part of it and contributed to what China has achieved so far.

Zoë Schiffer: Well, that leads right into my next question, because China has invested really heavily in electric vehicles. In part, I think, to reduce its dependency on foreign oil imports. How is that going so far?

Zeyi Yang: It's going pretty well, I will say. Yeah. China does not have rich oil reserve, and it has been importing oil from a lot of other places for the longest time. That's why the Chinese government has always been very careful about that, because if, for example, a World War III happens, those oil supply are going to be cut off. What is it going to do? I think in the early days, I will say the early 2000s, the idea of electric vehicles was this moonshot idea. Where they were thinking, “Maybe, if one day all the cars will be powered by electricity, then we don't need to import this oil anymore and we'll be much more secure if war breaks out.” That's when they really started investing in the research of batteries and electric vehicles with college research funds. But then, that gradually led to Chinese companies building up. They heavily subsidize any car company that can make a product that gets to run on the road and customers can buy. All of that, after years of heavy spending, led to what we have right now, which is a booming electric vehicle market in China. I think the latest data says that more than 50 percent of consumers when they're trying to buy a new car, they go for electric rather than a gas car. That's pretty remarkable.