Fierce Competition Forces Tesla To Seek Political Intervention On Chinese Electric Car Policies

Electric automaker Tesla is putting pressure on the White House to intercede on behalf of United States carmakers during a formal visit by Chinese leader Xi Jinping in September.

China forbids foreign carmakers from building vehicles in the nation without a local business partner. Chinese carmakers do not face such restrictions in the United States.

Speaking to the Wall Street Journal, Tesla spokesman Ricardo Reyes said, “China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face [in China].”

He added, “The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage.”

Though Tesla has had some accomplishments in China – with one enthusiastic fan building his own charging network across the nation – the organization has faced amplified rivalry in recent months from many Chinese-supported electric car startups. The new depreciation of the yuan against the United States dollar also makes it more costly to import vehicles from Tesla’s California branch to China.

Chinese smartphone maker and film streaming firm LeTV declared earlier this year that it is making a smart electric car. The organization has poached many engineers from U.S. carmakers, including Tesla. It joins Chinese companies Geely, BYD, Kandi, Foxconn and a host of others looking to enter the space.

Tycoon Elon Musk’s corporation is also facing rivalry closer to home. Wanxiang Group of China bought Californian electric car manufacturer Fisker Automotive out of insolvency in 2014 and is presently gearing up to resume production. Japanese automakers Nissan and Toyota have both unveiled electric cars, joining GM with the Chevy Volt.

In short, competition is tough and Tesla knows it. Anything it can do to catch a break seems like a prudent business decision.

Barack Obama is set to meet Xi in Washington in next month, the first formal state visit by the Chinese president, who met Obama in Sunnyvale, California in 2013 for an informal meeting soon after winning the presidency.

Economic matters are expected to dominate the program, predominantly Beijing’s depreciation of the yuan and its insistent involvement in the stock markets.

Obama has also vowed to talk to Xi on cyber security and Chinese hacking of U.S governmental agencies and businesses. Specialists have called for the U.S. leader to openly threaten the Great Firewall internet restriction apparatus as a method to prevent future Chinese cyber attacks.

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