Tesla CEO Accused of Kowtowing to China: A Tale of Two Musks?

Matt Posky
by Matt Posky

Tesla CEO Elon Musk came under fire this week after Bloomberg wrote a piece accusing him of playing nice with totalitarian China following years of showing totalitarian California a complete lack of respect. With the semiconductor shortage leaving the industry in a holding pattern, tabloid journalism seems to be filling in the gaps to the dismay of yours truly. However, Musk’s relationship with both countries remains relevant since they represent the two largest automotive markets on the planet and will dictate the trajectory of the business.

He’s being accused of being extremely apologetic to Chinese regulators, despite having become infamous for acting in the exact opposite manner in the United States. As you might recall, American Musk is all about flagrantly ignoring the rules and telling the government regulators to take their concerns into the bathroom where they’ll have the privacy necessary to stick them where the sun doesn’t shine. When it comes to high-IQ billionaires, our Elon is the bad boy’s bad boy. But Chinese Musk is said to be deferential and happy to comply with the request of oversight groups before they become official mandates.

He sounds like a total traitor! At least, that’s how China’s state-run media framed it before Western outlets took the reporting and made Elon seem even worse on Tuesday. The story has since been spreading online, encouraging this website to take another look to see if Mr. Musk is actually the double-crossing villain that’s being claimed.

Let’s forget for a second that Chinese state-run media is notorious for massaging engineered truths (and sometimes downright lies) on behalf of the Chinese Communist Party. Let’s take away the-difficult-to-verify production and economic figures they provide and ignore the fact that numerous English-text publications (e.g. China Daily) specifically exist in the hopes that they’ll be parroted by Western media.

Last week, news was circulating in Central Asia that Tesla had issued a public apology after a staff member blamed China’s energy grid for damaging a customer’s vehicle while charging. While perhaps not an egregious misstep, it’s been known that the Shanghai Electric Company (part of the State Grid Company) was working with automakers to see how China’s energy grid could be modified to better cater to EV charging. This includes finding ways of avoiding incidents of thermal runaway, which appear to be causing at least as many fires in Asia as it has here in the West.

This week, state-backed media claimed five Chinese regulators had summoned Tesla representatives in response to numerous quality assurance issues that allegedly posed a safety risk. The automaker was reportedly humble in its response, pledging to adhere to Chinese laws and regulations regardless of how strict they may be. But neither issue deals with Musk specifically, who seems to have a fairly nuanced take on both the U.S. and China.

Elon has repeatedly praised the Chinese people for being hard-working and less entitled than some of their American counterparts. “When you’ve been winning for too long you sort of take things for granted. The United States, and especially like California and New York, you’ve been winning for too long,” he said in an Automotive News interview from last year. “When you’ve been winning too long you take things for granted. So, just like some pro sports team they win a championship you know a bunch of times in a row, they get complacent and they start losing.”

He’s also taken heat for proclaiming that “ China rocks” while attempting to finalize business dealings there.

From Bloomberg:

Musk, 49, has been much feistier back home.

When the U.S. Securities and Exchange Commission sued the CEO over his 2018 tweets claiming to have “funding secured” to take Tesla private, Musk lashed out, calling it the “Shortseller Enrichment Commission” and saying he did not respect the agency.

He also hung up on the chairman of the National Transportation Safety Board earlier that year after a testy call about its investigation of a fatal Model X crash involving Autopilot.

Last year, Musk called the coronavirus shutdown orders that had forced Tesla to idle its California car plant “fascist” and threatened to move the company out of California before ultimately reopening the factory in defiance of local government orders.

That last one still ended up costing California future business opportunities with the EV manufacturer. Fed up with what he considered a regulatory wall, Musk decided to begin moving Tesla operations to out of the state. But the overall sentiment is that the CEO has an axe to grind with the United States (or at least aspects of its government) that might indicate his favoring China.

We’re less certain of this, especially considering the kinds of actions taken by other domestic carmakers looking to sell in what has surpassed the U.S. as the world’s largest automotive market. The bar for entry is extremely high and mandates cooperating with Chinese entities (via joint ventures) just to get a foot in the door. General Motors has spent years cutting deals that arguably favored China so it could maintain access, with CEO Mary Barra suggesting she saw “huge opportunities” for GM in November and noted that the region played heavily into its decision to accelerate EV development. Though that’s just one automaker in a list of many that would like to deepen their roots in Asia.

They’re all playing the same game. But they’re not all using Twitter at a pace that guarantees something will eventually come back to bite them. While Elon Musk has praised the Chinese people, he’s also gone out of his way to dump on communism by boiling down the philosophy of Karl Marx into the slogan “ Gib me dat for free.”

Of course, the Tesla CEO was also publicly proclaiming himself a socialist just a month earlier and managed to stir up a journalistic frenzy as everyone attempted to decide what that actually meant. “By the way, I am actually a socialist,” he wrote over the summer. “Just not the kind that shifts resources from most productive to least productive, pretending to do good, while actually causing harm. True socialism seeks greatest good for all.”

It’s hard to know how to take that when he had also said he used to be an alien. While presumably a joking reference to his South African birthplace and immigration by way of Canada, many suggested this was a subtle hint that he could be from another world. Could it be?!

No. But that doesn’t stop a deluge of articles half-heartedly suggesting otherwise.

Listen, I’m not going to pretend that Tesla isn’t supported by government subsidies and the sale of carbon credits. The United States made Musk a literal fortune and his involvement with China ensured that he became the richest person in history. But the speculation surrounding his bombastic personality has totally jumped the shark. We’re now seeing articles low-key framing the guy as a traitor, with precious little evidence to prove anything other than his being incredibly popular on Twitter.

After being forced to follow the man’s often entertaining antics for several years, the only conclusion I’ve managed to make is that he’s doing exactly what every other business magnate with dealings in China has done – just with a bit more panache and humor. And for every example of Musk praising China, there’s a reminder that he still loves the United States. “America is the land of opportunity – there is no other country where I could have done this,” he told Bloomberg in May.

Is that patriotism genuine? I couldn’t tell you. But I don’t think other outlets are equipped to do better and that’s roughly the point of this article. As the general tone of the planet continues to shift toward confused anger, the amount of media serving to tailor your thinking has risen dramatically. Sadly, that’s only making it harder to disseminate useful information from a frothing opinion.

Here are the facts. Taking all the above into account, Tesla has simultaneously been lambasted in Chinese media for recalling 30,000 Model S and Model X vehicles in the region and suggesting its energy grid might need work. It also faces arguably stiffer competition inside the market, as there are numerous EV brands on the scene that are willing to ape its style and business model without having to confront the kind of legal response that would be assured in the United States.

Paying China lip service to remain operational in an authoritarian state isn’t abnormal for any manufacturer and hardly provides any new revelations about Elon Musk. Tesla wants to remain in China so it can make money and announced a plan to export Shanghai-made Model 3 to Europe just a few months ago. There’s a lot riding on it and, frankly, it seems like the most damning issue. The company’s latest round of business decisions does indeed seem to favor Chinese labor at the expense of its domestic workforce. But the list of automakers that kind of thinking doesn’t apply to has been shrinking for decades.

Perhaps if we could focus on policy and how the industry actually behaves, we wouldn’t need to waste so much time speculating about which of the people in charge are villainous or virtuous. The trend has ranged from being a habitual distraction from bigger issues to the easiest way to assassinate the character of people/companies/concepts you don’t like without needing much evidence. Go be mad at Elon for not trying to secure American jobs just because the Chinese work for less. Or praise him for making another shrewd business decision as CEO. Just don’t let another allegedly reputable outlet tell you what to think based on nothing more than their own specious reasoning and some clever framing.

[Image: Tesla]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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2 of 18 comments
  • Superdessucke Superdessucke on Feb 10, 2021

    So he's kind of like LeBron James then.

  • Wiggles Wiggles on Feb 11, 2021

    Musk is being smart with the CCP government that can make billionaires disappear (Jack Ma). In the US Musk can take larger risks with the government as billionaire status protects you. Not so in China.

  • Lorenzo It's an election year, and Biden will drag down enough democrats without the state going deeper in the budget hole than it is now. Newsom isn't the smartest guy, but he has smart guys to tell him the state is running out of other people's money.
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  • Ravenuer No, I wouldn't be interested in doing this at all. Seems like it would be quite expensive.
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