As rivals jostle to showcase their latest EV models, Elon Musk’s company skips the country’s biggest auto show in years
The world’s leading EV maker hasn’t said why it won’t join the more than 100 exhibitors who are packing into China’s most prestigious industry event, which begins Tuesday and is the first since Beijing lifted pandemic controls and reopened the country’s borders.
By contrast, Tesla hasn’t introduced a new car model to China since the first locally made Model Y was delivered in early 2021. The company says its top priority now is to scale up global manufacturing capacity. On a call with investors last July, Mr. Musk said the consequences of Tesla not keeping up with its Chinese rivals were clear: “Any company that’s not as competitive as them will obviously suffer a market share decline.
Fierce competition and shrinking market share are two of the China headwinds that Mr. Musk is facing. Tesla also risks getting ensnared by the growing hostility between Washington and Beijing, while the Texas-based company has yet to deliver on a 2021 pledge that its next model would be designed, engineered and manufactured in China.
But at its March 1 investor day, Tesla said the next generation of its cars will be made in Mexico. EVs produced there qualify for a consumer tax credit in the U.S. of up to $7,500 under last August’s Inflation Reduction Act. Mr. Musk’s move drew fire from Washington. Mike Gallagher, the Republican chair of the House of Representatives’ select committee on China, expressed concern at what he called Tesla’s dependence on America’s main rival.What is your outlook for Tesla’s business in China? Join the conversation below.
As the Chinese market becomes more competitive, Tesla’s government subsidies are ending. Its preferential 15% tax rate with the Shanghai government—instead of 25%—is due to expire this year.
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