
At the end of April, Elon Musk, at the last moment, canceled a trip to India, instead showing up in Beijing, and snagging a deal to rescue Tesla. The results were immediate: The shares of the electric vehicle maker, which had been out of favor on Wall Street, soared on the news.
Now Washington has to be worried that China will control Mr. Muskโs other company, SpaceX, which is critical to U.S. ambitions in space.
During his two-day trip to China, the second in less than a year, the billionaire announced that he had struck a deal with Chinaโs Baidu on mapping and navigation software. The China Association of Automobile Manufacturers said in an April 28 statement that Teslaโs Model 3 and Model Y vehicles had passed Chinaโs data-security requirements.
In China, where car buyers are far more focused on tech features than Americans are, Mr. Musk has wanted to roll out Teslaโs โFull Self-Drivingโ software. Currently, his cars have only the basic โAutopilotโ driver-assistance feature. Most observers assume he is on the glide path to Beijingโs approval.
Mr. Musk certainly needs the upgrade. Not long ago, Tesla in China was viewed as a standout. Now, that is no longer the case. BYD Co. and โan entire fleet of EV upstartsโ are, in the words of Asia Times contributor Scott Foster, โincreasingly making it look like an ordinary car company.โ
As a result, Teslaโs market share is in a tailspin. A year ago, Tesla held the No. 1 ranking in Chinaโs new-energy vehicle retail segment. In the first quarter of this year, the company had fallen to third place. BYD in that period sold 586,000 cars, Geely 137,000, and Tesla 132,000. It is not clear that Tesla can compete in China, where the regime does just about everything it can to favor Chinese competitors.
Mr. Musk knows that China is โthe golden goose EV market.โ Teslaโs โgigafactoryโ in Shanghai, which opened in 2019, is the โheart and lungsโ of Mr. Muskโs car production. The facility is Teslaโs largest outside the United States. China is now Teslaโs second-largest market.
Byย Gordon G. Chang