Tesla's Elon Musk Tells Trump China Trade Rules 'Make Things Very Difficult'
March 08 2018 - 6:06PM
Dow Jones News
By Tim Higgins
Tesla Inc. Chief Executive Elon Musk took to Twitter on Thursday
to lobby the president on China's trade stance on auto makers,
saying the Middle Kingdom's current rules "make things very
difficult."
Mr. Musk's comments on Twitter came in response to a tweet from
President Donald Trump stating his administration has asked Beijing
for a plan to cut the annual U.S. trade deficit with China.
The Tesla CEO replied: "Do you think the US & China should
have equal & fair rules for cars? Meaning, same import duties,
ownership constraints & other factors."
Mr. Musk's comment suggests that he may be growing frustrated
with the pace of opening a factory in Shanghai to meet the growing
demand for Tesla's electric cars among Chinese consumers. Tesla's
revenue in China roughly doubled last year to about $2 billion from
$1 billion in 2016, ranking it behind the U.S. among Silicon Valley
auto maker's top revenue-producing countries.
Mr. Musk noted on Twitter how American-made cars imported into
China face higher duties than Chinese vehicles coming to the U.S.
and how foreign auto makers in China face restrictions on ownership
of factories. To avoid 25% tariffs, foreign auto makers build cars
in China through joint ventures with local manufacturers --
something that requires a sharing of profit and potentially
technology. It is an approach Mr. Musk has been trying to
avoid.
"The current rules make things very difficult," Mr. Musk wrote
on Twitter. "It's like competing in an Olympic race wearing lead
shoes."
Tesla's push into China comes as trade relations between the two
nations has seen increasing tension. The Trump administration is
asking Beijing for a plan to reduce the U.S.'s annual trade deficit
with China by $100 billion, people familiar with the matter have
told The Wall Street Journal.
Tesla is said to have forged a deal to set up in a special
free-trade area in Shanghai without a local partner, but it hasn't
announced any such agreement. Some analysts are skeptical that
Tesla could get a break on the tax. In November, Mr. Musk gave a
rough three-year time frame to begin manufacturing in China.
He has said a China factory with a capacity of at least 200,000
vehicles a year would build Model 3 sedans and the coming Model Y
sport-utility vehicle.
As Mr. Musk looks to expand in China, several Chinese-backed
startup auto makers have opened operations in the U.S. with
ambitious plans heavily inspired by Tesla's success.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
March 08, 2018 17:51 ET (22:51 GMT)
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