
As a testament to the importance of the China market, a revamped version of Tesla’s Model Y was launched here in January before the U.S.
To keep his business strong, experts say, Musk needs support from the Chinese government.
“It’s hard for most people who have not lived inside China to understand the power of regulators,” Dunne said. “You apply for a license in the United States or Europe, eventually you’re going to get a permit or license. In China, it’s a massive negotiation.”
As Tesla faces intensifying competition from Chinese EV makers, it rolled out a software update last month meant to closely mimic its full self-driving features in the U.S.
Tesla’s FSD software has yet to be approved in China.
That’s why it’s vital for Musk to stay in Beijing’s good graces, especially as his companies face backlash in the U.S., Europe and elsewhere over his work for the Trump administration.
“Beijing could decide to ban Tesla. They could subject Tesla to all sorts of investigations domestically,” Stone Fish said. “There’s almost no limit to what they could decide to do.”
That may explain why even as Musk has been vocal in his opinions on politics in countries as varied as Germany, Canada and Brazil, he has been relatively quiet about what goes on in Beijing.
“Musk is so incredibly gentle when it comes to China. It’s stunning,” Stone Fish said.
“He’s been so much weaker than even Chinese entrepreneurs on his unwillingness to criticize China or to say anything that could be construed as negative towards the party,” he said.
Musk has opposed U.S. tariffs on Chinese EVs, after initially supporting them.
“Neither Tesla nor I asked for these tariffs,” he told CNBC at a Paris tech conference in May after President Joe Biden announced a 100% tariff on Chinese-made EV imports. (The U.S. EV tariffs do not apply to Tesla because none of the cars it makes in China are sold in the U.S.)
Musk has also made favorable comments about China’s position on Taiwan, a self-governing island democracy that Beijing claims as its territory and says it is determined to gain control of even if it means using force.
“There is some inevitability to the situation,” he told CNBC in 2023.
Such comments have been praised by Chinese officials and condemned by Taiwan, which rejects Beijing’s sovereignty claims.
Some believe Musk’s warm relations with the Chinese government could be a boon for U.S.-China ties.
“Elon Musk can play some positive, constructive, even linkage role to connect China and the U.S. during this difficult time, particularly to deal with Trump,” said Wang Yiwei, director of the Institute of International Affairs at Renmin University of China in Beijing.
Others see more potential risk than reward, including U.S. lawmakers. Last month, the Republican and Democratic leaders of the House select committee on China warned that Beijing could try to use Musk to coax Trump toward more favorable policies.
“I do believe that the CCP will try and leverage any opportunity,” Rep. John Moolenaar, R-Mich., chairman of the committee, said at a Brookings Institution event in Washington last month.
“Are people going to be looking for that? And make sure that his lane is one that is not influencing China policy? I believe that is the case,” he said.
Rep. Raja Krishnamoorthi, D-Ill., the committee’s ranking member, said Chinese authorities “absolutely” see Musk “as an asset to them in any kind of negotiations,” a way to bypass Trump administration officials seen as less friendly to China such as Secretary of State Marco Rubio and national security adviser Mike Waltz.
“My hope is that the president is going to be listening to everybody very carefully,” Krishnamoorthi said at the same event.
Even Musk’s Chinese employees have doubts about Musk’s growing role in Washington.
“As a businessman, he should focus on the business,” said one Tesla factory worker in Shanghai who declined to be named for fear of reprisal. “After all, government affairs should be handled by the professionals.”
Eunice Yoon reported from Shanghai, and Jennifer Jett reported from Hong Kong.
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