Tesla's Elon Musk makes surprise visit to Beijing; meets Premier Li Qiang

Beijing: On a surprise visit to Beijing amid speculation that he may unveil Tesla's autonomous driving technology in the burgeoning electric vehicle (EV) market in China, billionaire Elon Musk on Sunday met Chinese Premier Li Qiang and discussed future expansion plans for his automobile.

Premier Li met with Musk, CEO of the US electric carmaker Tesla, in Beijing on Sunday, the state-run Xinhua news agency reported.

The SpaceX and Tesla chief travelled to China at the invitation of the China Council for the Promotion of International Trade, meeting with CCPIT president Ren Hongbin to discuss further cooperation with the country, official broadcaster CTGN reported.

Musk is expected to meet senior Chinese officials at the State Council and "old friends" in Beijing, Hong Kong-based South China Morning Post reported.

His Tesla has become a popular EV in China after he set up a USD seven billion factory in Shanghai which went into production in 2020.

Musk, who recently skipped a scheduled visit to India to meet Prime Minister Narendra Modi to firm up plans to open a Tesla factory in the country, is visiting Beijing when his Tesla market in China is threatened by the local EVs increasing sales.

The Austin-based (Texas) Tesla has faced fierce competition from Chinese EV makers in the past few years. It has cut the prices of its Shanghai-made vehicles by up to six per cent to maintain its leading position in China's premium EV segment.

Grace Tao, Tesla's vice-president of external relations in China, wrote a commentary piece in China's official newspaper People's Daily on Friday, saying autonomous driving is a key growth driver for the country's new energy vehicle sector, arguing that the technology will hatch new business models such as robotaxis, a vision that Musk has embraced, the Post reported.

Musk's latest visit to China coincides with the 2024 Beijing Auto Show, which kicked off on Thursday.

As a strong backer of Beijing in the US despite concerns over China's rise across the political divide in Washington, Musk enjoys red-carpet treatment in China.

In 2019, Tesla was allowed to drive cars into the Zhongnanhai compound, the living and working area of Chinese leaders, when former Premier Li Keqiang hosted the CEO, and during Musk's three-day visit to Beijing last June he was received by then foreign minister Qin Gang, according to the Post report.

The trip was warmly received by the Chinese public, with social-media posts focusing on the Chinese food Musk ate, and some referring to him as a "pioneer" and "brother Ma".

Tesla, the leader in China's premium EV segment, delivered 603,664 Model 3s and Model Ys made at its Shanghai Gigafactory to buyers in China last year, an increase of 37.3 per cent over 2022.

The growth rate matched the 37 per cent rise in sales recorded in 2022 when it delivered about 440,000 vehicles.

Tesla has sold more than 1.7 million cars in China since it entered the market in 2012 and located its biggest factory in Shanghai, where Musk enjoys high levels of political support for the project.

In a sign of its further commitment to China, Tesla bought a parcel of land in Shanghai to build a factory with a planned annual capacity of 10,000 Tesla Megapack batteries, which are used for battery storage stations.

His visit to China also coincides with Tesla's recent announcement to lay off "more than 10 per cent" of its global headcount to cut costs and boost productivity.

"As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity," Musk said in an email, adding that Tesla's growth has led to "duplication of roles and job functions in certain areas."

"As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10 per cent globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle," he said.

The layoffs that could impact more than 14,000 people came two weeks after the electric automaker reported its first year-over-year drop in sales in three years. The company has also warned that sales growth could be "notably lower" in 2024 than its stated goal of 50 per cent growth each year, according to a report by the state-run Xinhua news agency.