Musk Likely to Visit Tesla Factory in Shanghai, China This Week

Amid escalating tensions between the U.S. and China, reports have emerged that Elon Musk, CEO of Tesla, who recently decided on a large-scale investment in China, will visit Shanghai this week.

[Image source=Reuters Yonhap News]

Major foreign media outlets reported on the 29th (local time), citing multiple sources, that CEO Musk will visit China for the first time in about three years this week. During his visit, Musk is expected to tour Tesla's factory located in Shanghai and meet with senior Chinese officials. However, specific details about whom he will meet and what will be discussed have not been disclosed.

If the visit takes place, it will be Musk's first trip to China since early 2020, when he gained attention for dancing at an event held at Tesla's Shanghai factory. Musk's plans to visit China have been reported by major foreign media since March but had not materialized until now. Earlier in March, Tesla signed a contract to build a large-scale megafactory for electric energy storage in Shanghai. This investment by a U.S. company amid heightened U.S.-China tensions, including incidents such as the reconnaissance balloon shootdown earlier this year, has drawn significant attention. U.S.-China relations remain frozen, further strained by recent Chinese government sanctions against Micron.

For Tesla, China is also its largest overseas sales market. The Chinese market, the world's largest electric vehicle market, accounted for more than 22% of Tesla's sales last year. However, due to slowing demand and intensified competition with Chinese electric vehicle manufacturers, Tesla's electric vehicle sales growth rate in China has significantly slowed this year.

At the beginning of the year during an earnings announcement, Musk identified China as the most competitive market. In a recent interview with CNBC, he said, "There are some constraints on expanding (business) in China," adding, "It's not a demand issue." He also expressed concern over the escalating U.S.-China tensions, calling it "a worry for everyone." Last year, more than 710,000 electric vehicles were produced at the Shanghai factory, accounting for over 50% of Tesla's total production.