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China's foreign ministry: Tesla CEO Musk willing to expand in China - Reuters

Published 05/30/2023, 09:24 AM
© Reuters
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Investing.com -- Tesla (NASDAQ:TSLA) chief executive Elon Musk has told a top official in China that he is open to growing the business in the country, according to a statement from the Chinese foreign ministry on Tuesday quoted by Reuters.

Musk met with Chinese foreign minister Qin Gang after he arrived in Beijing as part of a visit to speak with senior government leaders and tour Tesla's Shanghai factory.

A foreign ministry statement said Musk stressed how much he did not want to see a decoupling of the U.S. and Chinese economies. In remarks attributed by the foreign ministry to Musk, the billionaire described the two nations as intertwined "like conjoined twins."

Tesla did not provide a response to a request for comment.

For his part, Qin told Musk that China would like to improve business conditions in the country.

Shares in Tesla climbed by more than 3% in premarket U.S. trading on Tuesday.

"It is a big deal that he is now visiting [China] this week at a key time for Tesla," analysts at Wedbush said in a note to clients. "Tesla continues to aggressively focus on building out its China footprint as this remains the golden goose [electric vehicle] market."

Musk's trip comes as Tesla attempts to address increasing competition from Chinese electric car makers and secure the expansion of its gigafactory in Shanghai. The company is targeting an uptick in output to 450,000 vehicles a year at the plant.

China is the second-largest market for Tesla behind the U.S., where the automaker has been offering lower prices in a bid to gain a greater domestic market share.

"While the macro is not rosy Tesla must continue to build out in China to further cement its EV footprint in this key market for the stalwart," the Wedbush analysts said.

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