## Tesla Halts Orders in China on U.S. Imported Models ##
The removal of an “order” button from Tesla’s Chinese website came after Beijing raised tariffs on American imports in response to President Trump’s levies against the country.
Yes, you can no longer order a Model S or a Model X in China because: tariffs. Any remaining inventory will be sold, after that: bupkis.
Luckily for Tesla (?) those are not the big sellers there, but it leaves the company with only one model for sale, in the face of the onslaught of Chinese brands like BYD, et al.
Guess that $300 million investment in His Orangeness is really paying off.
I expect that it will pay off when the Administration starts drafting the list of favored companies whose imports of Chinese components and products are exempted from the import tariffs. Tesla sources raw materials from China to make their batteries, and their energy business involves taking completed battery units and using them to build Megapacks - including a fair number imported from China.
Companies that Trump would prefer not to face massive price hikes because they are so visible (like, say, Apple) may still have to “pay” in ways both direct and indirect to get on that list - he does love himself a chance to wring people when he’s got them over a barrel. But I think Tesla’s going to get on that list for free…or for services rendered, if you will.
Of course. In fact, I’m sure they view that as an asset. Musk’s personal financial situation depends a great deal on China - China itself is one of the largest markets for Tesla, the Shanghai factories supply both that market and those of other countries around the world, and China is a major source of both raw materials and finished batteries for Tesla.
So even without doing anything, Xi probably (and correctly) views Musk as a voice in the administration urging some restraint on economic war with China. That might be where Musk’s inclinations are anyway (the technokings of Silicon Valley tend towards the libertarian), and it’s certainly consistent with the dressing down he’s been giving Navarro on Xitter.
If things got really ugly, Xi could try to squeeze Musk directly in an effort to influence Trump. But I think that their interests are enough aligned that it wouldn’t be necessary.
As a shareholder, I disapprove. I would vote him out of his CEO position in a heartbeat. He has damaged the Tesla brand to such a point that it may never recover.
I meant the average Chinese like the average German. I don’t think that is correct. Sure the people high up in the Chinese government might think that but I do not think they would mind the average Chinese starting to dislike Tesla’s product and Musk himself.
Oh, gotcha. I expect that the average Chinese person probably isn’t too aware of Musk’s role in the government, unless Xi has chosen to highlight that fact (and there’s no real reason why he would have done). The government probably has always had the ability to drive down consumer sentiment about Tesla’s - but that’s such an indirect lever to pull when they have so many direct levers (like perhaps having the local government develop difficulties in supplying the plants with adequate power, for example) that it seems like something they wouldn’t reach for. But if they decided to go nuclear on Tesla, that’s certainly something they could reach for also.
I would expect that Musk is far more valuable as a friend on the inside of the Administration right now, so the government will likely continue to treat Tesla well. As long as he continues to play nicely, too, of course…
I am starting to think that with a trade war that would all be thrown out the window. The Chinese government could be staying nice with Musk while telling the Chinese people all things American are bad, even Tesla. Thereby putting more leverage on Musk to do something. I don’t think Musk can survive losing China. Just my thoughts.
Judges rule on the rule of law. People vote for things they want. The two are not always compatible but then, that is why we have the rule of law. People do not understand that.
Oh, I agree he can’t survive losing China, and they have a lot of leverage over him. I just think they’d prefer to use a mechanism that they can turn on and off. If you go out and nuke Tesla’s perception among Chinese car customers, there’s probably no easy way to reverse that; but if you tell the local provincial government to turn off the power to the Shanghai facility if Musk doesn’t get the tariffs removed, then you can turn that power back on easily if he actually comes through.
I agree - but if the goal is to get Musk to intercede with the Administration in the tariff mess, then Tesla still has some value to you. So if you’re trying to lever that into influence in Washington, you want to use something that can be undone if Musk is successful - so that he actually has an incentive to help you.
Why can’t they have both. In fact why cant they use the citizens to leverage musk and then tell him everything will be good when the tariffs are gone. Double the Incentivization . Governments do this all the time. Get their citizens worked up and then negotiate. What you are suggest is to simplistic.
Most governments don’t have the powers that the government of China does. If the government of, say, France wanted to get their consumers to buy fewer Teslas compared to other brands, they would have to get their citizens worked up about Tesla - because it’s a free market economy. China, OTOH, is capitalism with Chinese characteristics - meaning that if the Chinese government decides they want fewer Teslas to be sold, they have a ton of levers they can pull without the complexity of a public relations campaign.
The problem with going out and getting people poisoned on the Tesla brand by noting how close he is to Trump (the proximate cause of the current trade war) is that it’s harder to put that genie back in the bottle. It’s easier to destroy a brand than to build it back up again. Much easier for the local provincial government to keep finding code violations that require the plant to be shut down a few days at a time, over and over again, until Musk gets the message and helps out…because it’s much easier to dangle the cessation of pain as a reward for compliance.
Expressions of patriotic, anti-US sentiment have emerged among the Chinese public, including vows to stop selling American products, charging American customers higher prices and the widespread circulation of a song condemning US tariffs.
and
Beijing’s media arm has kept up its defiant language reaffirming a willingness to “strike back”.
Sure. There will be some blowback just from the fact that Tesla is an American brand, and China’s going to be quite angry at what the U.S. is doing. There’s a certain amount of that which will be organic to the market.
That doesn’t mean that whipping it up further specific to Tesla is the smartest way for them to ratchet up pressure on Musk. If they’re trying to get him to intercede on their behalf, a much smarter technique would be to use a tool that they have more control over. They could easily push the market away from Tesla, but probably much harder to restore that.