Chinese authorities have recently expanded their acquisition of the Tesla brand, with government procurement lists in Shanghai and Jiangsu Province now including Tesla’s electric cars. Analysts suggest that the Chinese Communist Party (CCP) is showing favoritism towards Tesla in order to gain access to the carmaker’s battery technology, which could help alleviate production bottlenecks in Chinese electric vehicles (EVs).
In response to this special treatment, Tesla’s stock price saw a 25.88 percent increase in the first week of July, with market capitalization rising by $163.32 billion. Local authorities, such as Shanghai and Jiangsu Province, have expanded their acquisition of Tesla vehicles for corporate use.
Last year, Tesla faced challenges in China due to competition in the auto market and concerns over data security. However, following meetings between Tesla CEO Elon Musk and Chinese Premier Li Qiang, there has been a shift in cooperation between Tesla and China. The CCP has recognized Tesla for meeting automotive data security requirements, indicating a positive relationship between the two entities.
Analysts believe that Tesla’s advanced battery control technology may have been a key factor in gaining approval from Chinese regulators. By meeting certain conditions related to data security, Tesla has positioned itself as a valuable partner in China’s electric vehicle industry.
While there are risks associated with sharing cutting-edge technology with the CCP, Tesla’s presence in China has helped to boost the country’s EV industry. Despite challenges, Tesla’s partnership with China remains strong due to factors such as access to cheap labor and supply chains.
Overall, Tesla’s relationship with China highlights the complexities of doing business in the country, with the CCP employing various tactics to ensure compliance with its directives. As Tesla continues to navigate this landscape, its presence in China remains significant for both parties.
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