China Passenger Car Association CEO Warns Elon Musk Is Burning Up Consumer Demand For Teslas

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Within the US, many on the left are utterly turning away from Tesla as a result of Elon Musk’s excessive right-wing politics. However there are additionally many Donald Trump supporters who could also be turning to Tesla. In Europe, a big portion of the inhabitants is once more turning towards Tesla as a result of Musk’s help for far-right and fascist events in main European nations. Nonetheless, there are clearly additionally supporters of these events there which may be turned on to Tesla from all of it. From what I see and assume, it’s nonetheless a major web damaging for Tesla gross sales within the US and Europe, however we’ll see how issues pattern. Nonetheless, there’s yet another huge market — the second greatest for Tesla (solely behind the US). That’s China.

Elon Musk by no means says something damaging about Xi Jinping or the Communist Occasion of China. He throws round wild assertions about “communists” within the US, however his “love of free speech” goes out the window in the case of China. I’m wondering why. Nonetheless, as we’ve been saying since Musk tied his future to Trump’s diaper, Tesla faces nice danger in China. One incorrect step and — increase — you’re the subsequent Jack Ma. Winnie-the-Pooh is censored in China as a result of some individuals thought Xi Jinping regarded like him. (I’ve a tough time understanding the issue there, since Winnie-the-Pooh is so lovable and endearing, however it’s what it’s.) Some have presumed that any affiliation with Donald Trump is certain to chunk Musk and Tesla within the a** since Trump is constantly to anti-China. However it doesn’t appear to be that has had any notable instant impact. Nonetheless, he may very well be on skinny ice, particularly being attentive to some latest feedback out of China.

Cui Dongshu, CEO of the China Passenger Automotive Affiliation (CPCA), not too long ago provided some advice:

“As a successful businessman, one should be embracing 100% of the market: treat everyone nicely, and everyone will be nice in return. But if you look at it in terms of voting, then half of voters will be friendly to you and half of them won’t be. This is the unavoidable risk that’s come after he (Elon Musk) got his personal glory.”

Or maybe lets say that’s a critique of Musk’s actions. He’s declaring that Musk has already let private glory do harm to the Tesla model.

When it comes to the US, whereas Tesla consumers have been Democrats greater than Republicans, I believe the break up just isn’t as massive as many individuals assume. I do know that, traditionally, the corporate has had numerous consumers from each events. So, even with Trump’s latest endorsement, I believe that Musk’s in-your-face politics has shifted the potential Tesla purchaser pool from a majority of the inhabitants to … effectively, a smaller majority of the inhabitants. In fact, a big portion of the inhabitants isn’t going to think about a Tesla but for a wide range of causes, however I believe it’s only a portion of Democrat voters who’ve sworn off shopping for a Tesla — maybe round 40% of Democratic voters (I’m most likely being bold there), or round 10% of the general inhabitants (bear in mind, solely about half of the inhabitants votes). Beforehand, I assume a a lot smaller portion of Republican voters (perhaps 20%, as a wild guess) had sworn off shopping for a Tesla.

Anyway, as Cui Dongshu mentioned, it’s simply unhealthy enterprise to alienate a big portion of your potential buyer base.

However was Dongshu actually centered on US ramifications and Tesla gross sales? I assume there’s a little bit of a message in right here in regards to the Chinese language market. If we’re actually going right into a heated commerce/tariff battle with China, that’s not going to be standard with Chinese language leaders, or with Chinese language shoppers if these Chinese language leaders converse up about it. Moreover, as I mentioned earlier than, Musk has beforehand made disparaging feedback about supposed “communists” within the Democratic Occasion. I do know it’s one in all Musk’s pure abilities, however maybe he must be cautious about what he says even in a US context about such issues.

And there’s one other matter a reader simply raised. The COVID-19 story just isn’t over. “Missouri Attorney General Andrew Bailey secured a historic $24 billion judgment against the Chinese Communist Party for unleashing the COVID-19 pandemic — six times more than the previous largest judgment in Missouri history,” Bailey writes. “This is a landmark victory for Missouri and the United States in the fight to hold China accountable for unleashing COVID-19 on the world,”mentioned Legal professional Common Bailey. “China refused to show up to court, but that doesn’t mean they get away with causing untold suffering and economic devastation. We intend to collect every penny by seizing Chinese-owned assets, including Missouri farmland.” Musk catapulted into politics in response to COVID-19 lockdowns. Conspiracy theories about China and COVID-19 are considerable on the fitting. There’s actually a chance Musk might wade into this pool. And there may very well be repercussions if he does.

To date this yr, Tesla gross sales in China haven’t been good. January plus February gross sales figures had been under January plus February gross sales figures in 2024  — down about 50%. The brand new Tesla Mannequin Y is meant to save lots of the day and increase gross sales into the stratosphere once more, and preliminary reservation tallies have been huge. However there’s murmuring now that the reservation checklist my be thinning a lot sooner than anticipated — that a lot of these reservations might get refunded.

I assume that China is a bit just like the US — one huge, souring controversy can put a sudden dent in client curiosity in a product. One phrase from Xi Jinping and, effectively, many individuals wouldn’t be caught shopping for a Tesla. Elon Musk should stroll on eggshells right here. However even with out that, Chinese language individuals being attentive to US politics might not be a fan of Musk’s shut work with Trump. There’s no nation Trump has vilified greater than China. I’d assume that might flip some Chinese language individuals off from vehicles from Trump’s new greatest good friend.

And all of that ignores probably the largest elephant within the Chinese language EV market — the fast, fixed innovation and rollout of latest EV fashions. You possibly can’t sit for lengthy in any respect in China or your EVs shall be previous information.