Analyzing the Approval of Tesla Cars for Government Use in China

Chinese authorities have recently expanded their acquisition of the Tesla brand. Tesla’s electric cars have been included in government procurement lists in regions like Shanghai and Jiangsu Province. An analyst believes the CCP is giving special treatment to Tesla to acquire the carmaker’s battery technology to improve production of Chinese electric vehicles (EVs).

Tesla’s stock price saw a significant increase in early July, with its market capitalization growing by $163.32 billion. Local authorities in Shanghai and Jiangsu have expanded their acquisition of the Tesla brand. State-owned enterprises in Shanghai purchased Model Y vehicles for corporate use, while Tesla was the only foreign electric car brand listed in Jiangsu’s electric vehicle suppliers list.

Analyst David Huang believes the CCP’s decision to include Tesla cars in government procurement lists is symbolic and suggests a potential deal between Tesla and Beijing. Tesla faced challenges in China last year due to competition and concerns about data security. However, Chinese Premier Li Qiang praised Tesla as a successful example of trade cooperation between China and the U.S.

Tesla met requirements for automotive data security set by regulators, which may have contributed to its success in China. Mr. Musk has expressed willingness to deepen cooperation with China. Analysts believe Tesla’s advanced battery technology and cooperation with Chinese regulators have helped the company navigate challenges in the Chinese market. The CCP’s tactics with foreign companies involve offering support, then using various tactics to compel compliance with Party directives.

Tesla’s establishment in Shanghai in 2018, with support from the local government, has significantly boosted China’s EV industry. Despite challenges in the Chinese market, Tesla’s strong presence in Shanghai makes it difficult for the company to leave China.



Source link