Tesla CEO Elon Musk’s attempt to cozy up to the Chinese government has netted his beleaguered car company a tax break amidst an ongoing trade war between China and the United States.
The Los Angeles Times reports that amidst the ongoing trade war between China and the United States, Tesla CEO Elon Musks attempts to cozy up to the Chinese government have benefited Tesla which has been granted a tax break by the communist country. Musk has been on the ground in China this month, promoting the Chinese arm of his underground drilling company The Boring Company as well as discussing Tesla’s Shanghai facility.
Musk began his trip to China with a debate at the World Artifical Intelligence Conference in Shanghai, sparring with Alibaba Group Holding Ltd. Chairman Jack Ma about the future of AI. Musk praised China during the conference, stating that believes the country is “the future.” Musk said:
I spend a lot of my time on sustainable energy with tesla with you know electric cars and solar and batteries and that kind of thing and I’m really excited to be here in Shanghai for the Shanghai Gigafactory which is I think that Tesla china team has done an amazing job on. It is really mind-blowing like I’m just astounded by how good the job is and how much progress has been made and I think it’s a good story for the world and to say like look how much progress you can make in China.
This is extremely impressive like my hat is off you know you guys rock so I’ve never seen anything but so fast in my life before. To be totally Frank I’ve seen some crazy things so you know I think it’s like I really think China is the future.
Tesla claims it will open its Shanghai factory by the end of 2019 aiming to produce 3,000 Model 3 vehicles per week. The factory has received significant support from China, securing $521 million in loans from local banks. On Sunday, the United States hit China with tariffs on roughly $110 billion in Chinese imported goods. China retaliated by introducing higher levies on $75 billion worth of U.S. goods.
China plans to resume a suspended extra 25 percent duty on U.S. manufactured cars on December 1 with another ten percent on top for some vehicles. Taking into account the existing general duties on autos, the total tariff charged on U.S. produced cars would be as high as 50 percent. But Tesla will reportedly be exempted from a ten percent tax which is usually reserved for domestic electric car makers.
The announcement of this new tax break for Tesla came shortly after Musk met with Li Xiaopeng, China’s transport minister, who also reportedly toured the Tesla factory near Shanghai. Tesla recently raised its prices in China despite the value of the Chinese Yuan sinking, but even with the new factory, the company could be forced to raise prices on other models in the country again.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or email him at lnolan@breitbart.com