Elon Musk recently announced that he was going to China to unveil the Boring Company. With the announcement, Tesla and Musk’s tryst with Asia’s largest nation continues. It seems the friendship is strong and is set to last for years to come. And why not, China has reciprocated Musk’s affection with even greater enthusiasm and opened the doors for Tesla to drive innovation projects.
Musk’s relationship with China and its authorities started when the former planned to open up a Tesla factory in Shanghai. The opening ceremony of the factory was a huge event in China. With the Shanghai Gigafactory, Tesla became the first international company to benefit from China’s new policy, permitting foreign car manufacturers to establish wholly owned subsidiaries in China.
Gigabit 3 factory, Tesla’s first outside the United States, is located in Lingang Area, a technologically advanced zone park in Shanghai, and was created after Tesla signed the agreement with the Shanghai municipal government in July 2018.
The Chinese government has also announced that it is expanding Shanghai’s Free-Trade Zone (FTZ) to include the Lingang area, meaning Tesla will enjoy a host of benefits and incentives, being the only US-based company in the region.
Shanghai’s Gigabit 3 Factory: A game changer for Tesla
With an investment of over $ 7 billion, the Gigabit 3 factory was the largest foreign-invested manufacturing unit till date in the history of Shanghai. With a capacity for 500,000 cars, the factory will be producing the Model 3 sedan and the Model Y SUV for global markets.
It is no doubt that Musk is all excited about the factory and the role it will play in Tesla’s future. By producing its lower-end Model 3 and Model Y in Gigafactory 3, Tesla will aim at pricing the cars very competitively in the country, given the cost-effective labor force and the tax benefits.
“Just finished an amazing 3 day visit to China. The world has never seen human energy & vigor at such scale. Incredibly impressed with Tesla China team & potential for the future,” Musk said in a tweet.
“Excellent meetings with senior leaders in China. Very thoughtful about the long-term future,” Musk added.
With this, Tesla tapped into the fast-rising electric car market in China. The company has also constructed charging stations in China’s developed areas, such as the Yangtze River Delta in east China and the Pearl River Delta in the South.
Regulatory Support From Chinese Authorities For Musk
The support from the Chinese authorities is also substantial. After the project was announced, Tesla was granted low-interest loans by Shanghai banks to fund the factory’s construction work. Additionally, Tesla’s bid to purchase the 864,885-square meter land in Lingang Industrial Zone remained completely unchallenged. China Construction Third Engineering Bureau Co., Tesla’s partner in the construction of the factory, is also a subsidiary of China Construction, a state-owned company.
The affection for Musk is so great that while he met with Premier Li Keqiang, he was offered a Chinese green card. “I love China and want to come here more often,” Musk said, to which Premier responded, “If you do, we can issue you a Chinese green card.”
After US, Musk To Dig Tunnels In China
The tech billionaire is all set to attend China at the end of August. He will be speaking at the World Artificial Intelligence Conference, taking place in Shanghai between August 29 and 31. Along with 300 more speakers and 50 academicians, Tesla’s CEO will discuss the role of artificial intelligence in Tesla’s self-driving systems.
But more importantly, he will be at the conference to start off Boring Company in China, he said in a tweet. The Boring Company works to create tunnels for hyperloop transportation systems, which Elon Musk says says would be far faster than current high-speed trains and use electromagnetic propulsion.
When it comes to digging tunnels in the US, Musk has faced skepticism and opposition from US authorities in relation to getting excavation approvals and attracted major safety concerns. It did not fare well with Musk. In his tweets, he also compared the US with China in terms of the speed of infrastructure projects in the two countries. “China’s progress in advanced infrastructure is more than 100 times faster than the US,” he tweeted.
Musk has expressed praise for China’s infrastructure projects for a long time, saying China’s innovation strategy is superior to the US. On the far end, China has also welcomed Musk and given him the freedom that he could not find in the US.
China with its projects related to artificial intelligence and advanced infrastructure is a perfect match for Elon Musk. With support from the government, and Musk’s own liking of the hardworking nature of people and authorities, it seems China would be a great home for Tesla.
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Vishal Chawla is a senior tech journalist at Analytics India Magazine and writes about AI, data analytics, cybersecurity, cloud computing, and blockchain. Vishal also hosts AIM's video podcast called Simulated Reality- featuring tech leaders, AI experts, and innovative startups of India.