Elon Musk praises Chinese automakers amid regulatory scrutiny

An unusually scripted Elon Musk issued conciliatory and appreciative comments to Chinese automakers during a pre-recorded appearance at China’s World New Energy Vehicle Congress, a world away from his remark style in the United States.

“I have great respect for many Chinese automakers for driving them” [EV and AV] Technologies,” he said, a reflection of the ring light reflected in the window over his left shoulder. The whole tableau was enough to make anyone suspect there was a crisis communications expert, urging him to continue with his prepared remarks.

Then again, perhaps Musk doesn’t need any outside temptation; According to regulatory filings, China is one of the most attractive markets for electric vehicles in the entire world, accounting for about a fifth of Tesla’s total sales last year — or $6.66 billion.

While the United States remains one of Tesla’s biggest markets, the company has expanded aggressively in China, including opening the Gigafactory Shanghai in 2019 to manufacture the Model 3 and Model Y. Tesla faces competition from Chinese automakers, including electric car startup Xpeng and search giant Baidu.

“My clear observation is that Chinese automobile companies are some of the most competitive in the world, especially because some are very good at software, and it is software that will shape the future of the automobile industry, from design to manufacturing, and especially autonomous driving. Musk said in the message.

The company’s entry into the EV market in the world’s most populous country was a bumpy one at first, but Tesla managed to change that. Last year, the Tesla Model 3 was the best-selling EV in China. Tesla has also enjoyed unprecedented autonomy in the region, particularly as it is the only non-Chinese automaker allowed full ownership of its local subsidiary. It’s a fact that Musk has taken note of in previous public appearances.

“I think here’s something that’s really quite remarkable, Tesla is the only foreign manufacturer that has a hundred percent-owned factory in China,” Musk said during the company’s Battery Day event last year. “It’s often not well understood or appreciated, but having only a hundred percent owned foreign factory in China is a really big deal, and it’s paying huge dividends.”

But it hasn’t all been roses: The company has faced negative media from both consumers and regulators this year, starting in February when Chinese government officials called company executives for a meeting on vehicle safety concerns. (To which Tesla said, “We sincerely accepted the guidance of government departments and took an in-depth look at the shortcomings in our business operations.”)

Then, in April, a woman who said she owned Tesla protested the company at the Shanghai Auto Show in April. Bloomberg reported a few months later that Tesla was attempting to build relationships with Chinese social media influencers and auto-industry publications to counter all the bad PR.

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In his pre-recorded remarks, Musk also responded to a question on self-driving vehicles and data security, calling it “the responsibility of not just a company but a cornerstone of the growth of the entire industry.” The issue is particularly sensitive when news emerged that the Chinese military has banned drivers from parking their Teslas at its facilities. Tech Wire Asia reported that last month, China issued new regulations aimed at enhancing data security in connected automobiles. Tesla and other automakers including Ford and BMW moved to set up local data storage centers in China.

“Tesla will work with national authorities in all countries to ensure the data security of intelligent and connected vehicles,” he said.

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