As Tesla faces a drop in sales and reports of mass layoffs, it appears Musk is turning to China in a bid to reverse the company’s fortunes.
Tesla CEO Elon Musk has made a sudden visit to China and has met with senior government officials, reportedly to boost the company’s stake in the country.
The CEO shared an image on X where he is meeting with premier Xi Qiang and claims the two have known each other for many years. A source told Reuters that Musk is expected to discuss the rollout of Tesla’s Full Self-Driving (FSD) software. This source also claimed Musk is seeking permission to transfer data overseas.
This FSD technology was developed by Tesla years ago but has not yet entered the massive Chinese market. Earlier this month, Musk told one user on X that the technology may enter China “very soon”.
Musk’s visit to China follows a period of turmoil for Tesla, which recently reported a lag in EV sales – which the CEO attributed to pressure from the hybrid vehicle market. Tesla’s stock has fallen by roughly 32pc since the start of 2024.
A leaked memo earlier this month suggests Tesla plans to cut more than 10pc of its staff globally in response to these lower sales. Musk said in this leaked memo that the job cuts are part of plans to reduce costs and increase productivity, in response to the company’s rapid growth in recent years.
Tesla had more than 140,000 staff as of December 2023, suggesting the layoffs will impact more than 14,000 employees worldwide.
“There is nothing I hate more, but it must be done,” Musk said in the leaked memo. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
Fortunes took a bad turn for Tesla towards the end of 2023, as Chinese rival BYD beat Tesla in its fourth-quarter sales for the first time. The Chinese EV maker also knocked Tesla off its pedestal as the world’s leading manufacturer of BEVs in July 2022.
Earlier this month, Tesla posted a decline in quarterly deliveries for the first time in nearly four years and missed Wall Street estimates. The company has also been cutting the price of its Tesla models, a move that boosted its sales in 2023.
Meanwhile, Tesla’s FSD software may not be the path to bring the company back up from this slump. A recent investigation claims Tesla’s driver-assist features are insufficient at keeping drivers engaged in driving and that the company’s Autopilot and FSD features are linked to hundreds of crashes.
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