Elon Musk’s long and complex relationship with China moves into a new phase

BEIJING, May 15 — Elon Musk’s complex and evolving relationship with China is entering a new phase.

In China, Musk has long been viewed with a mix of admiration and criticism. While he is often praised as a visionary entrepreneur, he has also faced scrutiny from regulators and public backlash over customer complaints involving Tesla. Meanwhile, concerns within China’s military circles over the dominance of SpaceX and its Starlink satellite network have added further tension. At the same time, the rapid rise of local electric vehicle makers is gradually narrowing Tesla’s advantage, potentially challenging Musk’s influence and standing in the market.

Musk is currently part of a delegation of more than a dozen top executives accompanying US President Donald Trump to Beijing for talks with Xi Jinping, alongside major figures such as Apple’s Tim Cook and Nvidia’s Jensen Huang.

The group mainly consists of business leaders looking to address operational and regulatory issues with Beijing. Musk, however, is already familiar with the complexities of operating in China’s tightly controlled and highly competitive environment.

Speaking briefly outside the Great Hall of the People, Musk said he hoped to achieve “many good things” in China.

Despite growing competition from Chinese EV manufacturers in terms of pricing and technology, Musk and Tesla still hold significant influence in the country. Analysts note that this is partly because Musk’s business interests align with China’s strategic priorities, including electric vehicles, artificial intelligence, autonomous driving, robotics, and satellite technology.

Tesla’s self-driving capabilities are still regarded by some analysts as a benchmark in China’s EV industry, influencing local automakers as they develop their own systems.

Tesla also holds a unique position in China’s automotive sector, having become the first foreign carmaker allowed to fully operate without a local partner when it established its manufacturing presence in 2018.

The company sold around 626,000 vehicles in China last year, ranking it among the country’s leading EV manufacturers, with China accounting for roughly one-fifth of Tesla’s global revenue.

Industry observers say Tesla’s emphasis on software-driven vehicles and battery performance has significantly shaped the development direction of China’s domestic EV industry, with local automakers studying and adapting its approach during the pandemic-era supply chain disruptions.

However, tensions remain in other parts of Musk’s business empire. China has expressed concern over the influence of SpaceX’s Starlink satellite network, particularly in relation to its military applications and global communications reach, prompting efforts to develop domestic alternatives.

Although Musk’s social media platform X is blocked in China, he still maintains a strong following on Chinese platforms such as Weibo, where he is often described as a “global icon” and technology pioneer.

Musk’s current visit also comes as Tesla pursues expanded regulatory approval in China, including for its advanced driving assistance systems, while continuing to deepen its supply chain ties with local manufacturers.

Despite past controversies — including regulatory warnings, public criticism over customer service issues, and restrictions placed on Tesla vehicles in certain sensitive locations — Musk has continued to maintain a pragmatic relationship with Chinese authorities, which has gradually stabilised in recent years.

Looking ahead, analysts suggest that the biggest challenge to Musk’s influence in China may come not from regulation, but from the rapid advancement of domestic competitors.

As Chinese EV and technology firms continue to close the gap, Musk’s dominance in the market could gradually diminish, although he is still expected to remain a prominent figure in China’s tech ecosystem. — Reuters