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Elon Musk made an unexpected visit to Beijing on Sunday to meet China's No. 2, Premier Li Qiang, as Tesla Inc faces falling sales and data security concerns in the world's largest auto market.
Musk arrived in the Chinese capital on Sunday afternoon and met with Li, as well as Ren Hongbin, president of the China Council for the Promotion of International Trade, a group under the Ministry of Commerce, according to Chinese state media.
Li described Tesla's business in the country as a successful example of economic and trade cooperation with the United States, China's National Broadcasting Corporation reported. Li was head of the Communist Party of Shanghai in 2018 when Musk decided to invest in the eastern Chinese city.
No other details about the meetings were available, and Tesla did not immediately respond to questions.
The visit came just over a week after Tesla's chief abruptly canceled a trip to India, where he was expected to meet Prime Minister Narendra Modi, while the group explores starting production in the country.
Tesla's stock price has fallen by about a third so far in 2023, as it loses ground in China to local rivals and faces a global slowdown in electric vehicle sales growth that has forced it to cut thousands of jobs.
The Chinese group's sales fell 4 percent year-on-year in the first quarter, to 132,420 vehicles, according to data from Automobility, a consulting firm in Shanghai, even as total production of new energy vehicles – a category that includes hybrid cars – rose by 32 percent. The hundred.
Figures show that Tesla's domestic market share in this sector was 7.5 percent, well below the 33 percent share achieved by BYD, the Chinese electric car manufacturer backed by Warren Buffett.
Tesla's performance in China contributed to a worse-than-expected first-quarter profit decline, with Musk vowing to bring forward the launch date of “more affordable” models.
In a phone call last week, he said Tesla hopes to gain regulatory approval for more self-driving capabilities in China, as it moves toward using its cars around the world in so-called robo-taxi service.
However, the group's ambitions to roll out the most advanced self-driving technology in China are complicated by requirements to store user data needed to improve its systems locally, which were largely developed in the US.
China's aggressive cyber governance has raised concerns about Tesla's data collection in the past.
The world's second-largest economy is Tesla's largest market outside the United States and a vital part of the supply chain for its electric cars.
Musk's decision to build a massive multibillion-dollar factory in Shanghai is credited with helping drive the rapid growth of China's electric vehicle industry.
But Tesla's recent loss of market share in the country comes after the decision to cut prices in China in late 2022 sparked a price war that led to intense competition in the local car market. The group also released new models more slowly than its competitors.
Along with BYD, which rivals Tesla as the world's largest electric vehicle producer and is currently slightly behind in terms of units sold globally, Musk also faces emerging competition from Chinese tech groups such as Huawei and Xiaomi, which are increasing their bets on electric vehicles.
Analysts have also warned that Musk's businesses in China may be vulnerable to geopolitical retaliation from security hawks in Beijing.
X, the Musk-owned social media platform formerly known as Twitter, is banned in China. Officials also expressed concerns about ties between SpaceX, Musk's commercial rocket and satellite company, and the US military.
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