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Elon Musk Shoots Down Concerns Tesla’s Expansion In China Will Give President Xi Control Over US EV Market

Tesla CEO, Elon Musk, and 2024 Republican Presidential candidate, Vivek Ramaswamy recently engaged in a Twitter back-and-forth about Tesla’s continued expansion in China and its implication for the US automotive market and national security.

Elon Musk, CEO of Tesla, SpaceX, and Twitter, and Vivek Ramaswamy, author of "Woke, Inc." and a 2024 presidential candidate for the Republican party recently, engaged in a Twitter back-and-forth about Tesla’s expansion in China and its implication for the US automotive market and national security.

The Twitter back and forth began when Tesla Asia’s official Twitter page tweeted a picture of a signing ceremony between Tesla officials and Chinese officials for a new Megafactory to be built in China, with the caption "We set off on a new journey towards Master Plan 3. Meet Megafactory in Shanghai, China."

The new factory was announced yesterday and has a production capacity of 10,000 Megapacks a year. The plant is expected to begin construction next quarter and begin operations in Q2 2024. The new Megafactory in China is part of Tesla’s plan to build several new Megafactories across the world and follows in the success of Tesla’s Lathrop, California plant which has already reached a production rate of 7000 Megapacks a year.

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The signing ceremony for the new Megafactory in China was a celebration as it is expected to bring in more than $20 billion in annual revenue for the EV maker and contribute to the economical development of the nation.

However, not everyone has regarded Tesla’s continued expansion in China as a good thing. Ramaswamy responded to the tweet announcing the new plant, saying "This is concerning. When we’re all forced to drive electric vehicles, the real master won’t be Elon. It’ll be [Chinese Presidant] Xi Jinping, and the name ‘Master Plan 3’ is eerily spot-on."

Ramaswamy continued by writing “I love what @elonmusk is trying to do with Twitter but doubling down with the CCP [Chinese Communist Party] is another matter. Companies should & will continue to do whatever allows them to be most successful, but it’s the job of U.S. policymakers not to let American companies sell Xi Jinping the rope today that he’ll use to hang us tomorrow.”

Finally, Ramaswamy concluded by adding “That’s exactly what the climate cult accomplishes, and electric vehicle subsidies are one of many small pawns in that game.”

Ramaswamy’s overall criticism appears to be that when Tesla opens a plant in China, it shares a lot of its EV technology with the Chinese. And once the US transitions to fully electric vehicles, the Chinese government will use the technology it took from the US companies, build EVs in China and export them back to the US and gain a lot of power in the US where only EVs are allowed on the roads.

And with the last part mentioning “climate cults” and EV subsidies, Ramaswamy appears to be suggesting climate activists pushing for EV subsidies are in actuality working to increase President Xi Jinping’s influence over the US.

To say the least, this is certainly an interesting response to Tesla announcing that it’s building a new Megafactory in China. Having said that, there is still some truth to Ramasawamy’s concern about technology transfer to China.

Even Tesla at the recently held Investor Day has admitted that of the more than 10,000 employees that the company employs in the whole of China, less than 30 are non-Chinese citizens. Meaning there is immense technological transfer taking place between Tesla and China, this is especially alarming when we take into consideration, Giga Shanghai has become by far Tesla’s largest and most important factory in the world.

Although this part is irrefutable, Elon Musk nonetheless disagrees with the next leap of logic suggesting that Tesla’s expansion in China gives President Xi power over the US. Musk replied to Ramaswamy's tweet, saying "Yeah, wrong on many levels. Tesla is increasing production rapidly in Texas, California & Nevada.”

And for the part about EV subsidies Musk continued by writing “Our competitors require subsidies, not us. That said, if competitors get subsidies, Tesla should get them too. Tesla’s competitive position would improve if all subsidies ended."

Musk’s reply noting that Tesla is rapidly increasing production at 3 factories in Texas, California & Nevada, I believe is enough to assuage Ramaswamy’s concerns that China in the long run will take over the EV market in the US.

And when it comes to the EV tax breaks, if Ramaswamy is worried about China’s influence over the automotive market in the US, the recently passed EV incentive should lessen his concerns as the law specifically bars EVs or batteries built in China from receiving the tax incentive.

However, if Ramaswamy’s objection is with the overall push for EVs and climate change advocacy then that is a whole other issue and you can tell me what you think about that down in the comments.

We will be sure to keep you posted as Tesla builds out the new factory and grows its energy business. Until then, make sure to visit our site regularly for the latest updates.

So what do you think? Are you excited to learn that Tesla has signed a deal to build a new Megapack factory in China? Also, what do you make of the concerns about technology transfer from Tesla to China? Let me know your thoughts in the comments below.

Image: Courtesy of Tesla

For more information check out: Tesla Teases 3 New Vehicles, A Bus, Passenger Van, And ‘Semi Light’ In A New White Paper For Master Plan Part 3

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.