Tesla CEO Elon Musk Draws Strategic 'line in the sand' with China, Says Wedbush

Tesla CEO Elon Musk Draws Strategic 'line in the sand' with China, Says Wedbush

Photo: WU WA/YouTube

Tesla CEO Elon Musk joined the China Development Forum 2021 where he commented on recent press reports that Tesla vehicles are prohibited from parking at military facilities in China. Responding to this news, Musk has set a strategic “line in the sand” with China, Wedbush said.

Wedbush analyst Daniel Ives notes that news from China last week indicating that the country is restricting the use of Tesla electric vehicles by some government and military personnel, citing national security concerns, has prompted Wall Street to focus on Tesla's response to this. During the China Development Forum 2021, Musk told the government that Tesla would never release data collected by its vehicles in China or other countries to the US government. “There’s a very strong incentive for us to be very confidential with any information,” he explained. "If Tesla used cars to spy in China or anywhere, we will get shut down."

Ives said the announcement was important to Tesla and Musk given the strategic importance of the company's EV ambitions in China. "We believe this statement (while assumed) was important for Tesla and Musk to make directly to the Chinese and the government in Beijing given the strategic importance of its EV ambitions within China," wrote the analyst in a research note.

Ives noted that with the looming cold technology war between the United States and China, Tesla remains under the crossfire, so Musk needed to draw a clear line in the sand to reassure Beijing on this delicate issue. "With a brewing Cold Tech War between the US and China, Tesla (as well as Apple, semis), remain caught in the crossfire and ultimately Musk needed to draw a clear line in the sand to assuage Beijing around this sensitive issue and make sure this stays a contained issue within China with no more negative ripple effects for Tesla," wrote the analyst.

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Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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