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China handed Elon Musk special privileges to set up a Tesla plant in the country, New York Times reported. This leaves him vulnerable to leverage from Beijing, the report added, citing former Tesla employees, diplomats, and policymakers who described Elon Musk’s relationship with China’s government.

Tesla and SpaceX’s CEO Elon Musk looks on during an in-conversation event.(AP)

The report claimed that Elon Musk was offered concessions from the Chinese government to set up a Tesla plant in Shanghai. The construction of this plant began in 2019, it was earlier reported. 

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China offered Tesla perks which included low-interest loans, new emissions credit policy which the company profited from and even changed ownership rules so that Tesla could set up without a domestic partner, the report claimed. Tesla’s China plant accounts for more than half of the company’s global deliveries and the company is increasingly dependent on the low costs of car production in China, the report added. 

China is building a powerful EV industry of its own while keeping Tesla on the back foot, the report said, adding that Tesla’s presence in China has helped to turbocharge its EV industry by increasing innovation in key sectors.

US lawmakers are concerned about Elon Musk’s dependence on China, particularly given his ownership of SpaceX, as per the report. The satellite company has valuable Pentagon contracts although Elon Musk emphasized earlier that his companies are separate entities.

Elon Musk has even taken pro-China stance on issues including Taiwan.

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