Elon Musk's extensive ties to China, explained

Vox

18-03-2025

is a senior correspondent at Vox covering foreign policy and world news with a focus on the future of international conflict. He is the author of the 2018 book, Invisible Countries: Journeys to the Edge of Nationhood , an exploration of border conflicts, unrecognized countries, and changes to the world map.
Elon Musk has opinions on how a lot of the world's countries should be run.
But one country tends to get a pass from the world's richest man. He is, in his own words, 'kind of pro-China.' The self-proclaimed 'free-speech absolutist' has not applied that position to China's draconian censorship regime, and Musk has defended the Chinese government's positions on a range of other issues.
From a business perspective, this makes sense. China is vital to Musk's car company Tesla as both a producer of vehicles and as a consumer market. Musk is also hardly unusual among major global tech CEOs in defending China.
'Musk's comments on China aren't out of the norm for the CEO of a major Western business,' said Isaac Stone Fish, CEO of Strategy Risks, a consultancy focused on the risks of doing business in China. 'The distinction is that [Apple CEO] Tim Cook is not on Twitter talking about how awful USAID is or meddling in European politics.'
Musk's business interests in China and overall pro-Beijing attitudes also stand out among his new colleagues in the Trump administration. Trump's foreign policy team is generally united in its hawkish views on China. Trump himself has accused Beijing in the past of a policy to 'rape our country' and blamed it for the Covid pandemic, along with a host of other ills.
As the US and China appear to be hurtling headlong into a trade war, and even as Trump seeks a meeting with China's Xi Jinping in hopes of hammering out a new trade deal, Musk's ties to China — and the potential leverage they could offer Beijing in future negotiations — are getting more notice in both countries.
During the recent quasi-infomercial on the White House lawn, during which Trump purchased a Tesla and made a sales pitch for the slumping company, the president made clear that the profits of Musk's companies will be a priority for the administration. This raises questions about whether the interests of those companies will come into play as the administration shapes its policies toward its fellow superpower.
China and Tesla need each other
The symbiotic relationship between Tesla and China almost can't be overstated. In 2019, the company opened its Shanghai 'gigafactory' with hundreds of millions of dollars in loans from Chinese banks. It was the company's first factory outside the US, as well as the first wholly foreign-owned car company in China, where automakers typically enter into joint ventures with Chinese companies.
It is now Tesla's largest factory, producing half of the company's cars globally last year. Musk has praised workers at his Chinese factory for 'burning the 3 am oil…whereas in America people are trying to avoid going to work at all.' The remark came at a time when the factory was literally having workers sleep in the factory due to Covid restrictions.
Tesla has also benefited from selling cars in China's fast-growing electric vehicle market: Sales in China rose 8.8 percent in 2024, a year in which the company's global sales fell for the first time. (Tesla did not respond to a request for comment.)
'It's their second most important market and the only market that's continuing to grow,'' said Tu Le, an expert on the Chinese car market and director of the market research firm Sino Auto Insights.
Along the way, Musk has developed relationships with senior Chinese leaders, notably Premier Li Qiang, China's No. 2 official, who reportedly offered him a Chinese green card during a meeting in 2019.
Thanks to his real-life Tony Stark image, Musk has become something of a pop culture figure in China, as, perhaps more surprisingly, has his mother.
Elon Musk books displayed during the Shanghai Book Fair 2024 in Shanghai, China. Ying Tang/NurPhoto via Getty Images
The relationship between the Chinese government and Tesla has been mutually beneficial, Le told Vox. The company's investment in China came at a time when the Chinese government was trying to spur the creation of a local market for electric vehicles. That effort worked phenomenally well: more than half of cars sold in China now come with the distinctive green license plates marking them as EVs, and China accounted for more than 60 percent of EV sales globally last year.
This has also led to an explosion of new domestic Chinese EV producers, including Tesla's primary competitor BYD, a company which Musk once literally laughed at but which now outsells Tesla globally.
Tesla retains some cachet as a premium brand, Le says, but even in China, its sales are starting to slip. Musk is currently pushing to win approval from Chinese regulators for Tesla's 'full self-driving' technology. The company is currently hampered by rules which prevent data from Chinese drivers from being taken out of the country, which Musk says has forced them to use publicly available videos of Chinese streets to train their vehicles.
Tesla last month rolled out a partial self-driving mode on its Chinese models, though it costs almost $9,000, while BYD is offering similar technology for free on its vehicles.
'China is the linchpin to Tesla's overall long-term strategy,' said Le.
Musk's China ties are deeper than Tesla
Musk's activities in China had attracted controversy even before he took on his new political role. In 2022, Tesla was blasted by human rights groups and lawmakers for opening a showroom in China's Xinjiang region, where the government's treatment of ethnic Uyghur Muslims had been described as a genocide by both the Trump and Biden administrations.
The critics included then-senator, now Secretary of State Marco Rubio, sponsor of that year's Uyghur Forced Labor Prevention Act, who described the showroom on Twitter as an example of 'Nationless corporations … helping the Chinese Communist Party cover up genocide and slave labor.'
Musk's China ties have also raised security concerns, given that another of his companies, SpaceX, is a major US military contractor and Musk himself has 'top secret' security clearance. In 2022, Rep. Chris Stewart (R-UT) pushed for closed-door intelligence briefings on Capitol Hill to determine whether SpaceX had any links to the Chinese government, telling the Wall Street Journal, 'I am a fan of Elon Musk and SpaceX, but anyone would be concerned if there are financial entanglements with China.'
Several companies with links to Musk's businesses have also been targeted by the US government. In January, the Pentagon added Contemporary Amperex Technology Co. (CATL), the world's largest producer of lithium-iron-phosphate batteries, and a major Tesla supplier, to its list of 'Chinese military companies' that produce both civilian and military goods. US firms are not prohibited from doing business with companies on this list, but the list is intended to raise reputational and compliance costs.
Another company on the list, the Chinese internet giant Tencent, at one point owned a 5 percent stake in Tesla, though according to media reports, it has since divested its holdings. Tencent is the parent company of WeChat, which was once often referred to as 'China's Twitter,' but has since become an all-encompassing app used for a wide variety of payments and communication. Musk has cited WeChat as a model for the 'everything app' he would like to build X into.
The true extent of Musk's links to Chinese companies may not be fully known. The Financial Times reported that Chinese investors have been funneling tens of millions of dollars into Musk's non-public companies, like SpaceX, Neuralink, and xAI, using opaque ownership structures that shield investors' identities.
China's man on the inside?
Why does any of this matter? Musk's influence may already be helping to shape US policy toward China. At the end of last year, he publicly opposed a bipartisan spending bill that included measures to regulate US investments in China. A stopgap bill was eventually passed without the provision, with Rep. Jim McGovern (D-MA) accusing House Republicans of caving because 'Elon had a problem.'
Experts say Chinese leaders are hoping to leverage their connections to the DOGE boss to influence the administration's policies. Chinese Vice President Han Zheng met with Musk on the eve of Trump's inauguration. TikTok CEO Shou Chew has also been in communication with Musk, viewing him as a conduit to the White House as the company tries to navigate concerns about its Chinese parent company ByteDance.
In February, the Financial Times reported that Chinese officials were considering using Tesla's question for approval for self-driving as a bargaining chip in trade negotiations with the Trump administration.
'They absolutely see him as an asset to them in any kind of negotiations, a way to bypass Rubio, a way to bypass [national security adviser Michael] Waltz, a way to bypass those whom they see to be less friendly to them on their issues, and they're going to use him as a conduit,' Rep. Raja Krishnamoorthi (D-IL), ranking member of the House Select Committee on the CCP, told Vox at a recent event in Washington. (The White House's National Security Council did not respond to a request for comment.)
The committee's chair, Rep. John Moolenaar (R-MI) didn't criticize Musk directly but agreed that 'they're going to use every bit of leverage they can.'
On paper, a national security team that includes Rubio and Waltz reporting to Trump seems like a China hawk's dream. And in some respects, such as Rubio's push to keep Chinese economic interests out of the Panama Canal, it has been. Chinese officials are reportedly concerned that the Trump administration will use tariffs to pressure other developing countries to reduce their ties with Beijing.
But in many respects, the administration has been less hawkish than many expected. It's true that Trump has slapped 20 percent tariffs on Chinese goods, ostensibly over China's role in the global fentanyl trade, though these are less than the 60 percent tariffs he proposed on the campaign trail, or the 25 percent tariffs he has now slapped on Mexico and Canada. (Canada and European countries have earned Trump's ire more than China, at least so far.)
Trump also backed off a move to close a tax loophole used by Chinese fast fashion brands like Temu and Shein to ship to the United States, and despite having once called for the banning of TikTok, his administration appears to be in no hurry to enforce the ban on the app passed by Congress last year.
Trump's foreign aid cuts have dealt a blow to dozens of nonprofits monitoring corruption and human rights abuses in China, as well as Tibet's government in exile. Statements by Trump and some of his senior officials, as well as the administration's treatment of Ukraine, have cast doubt on whether the administration would intervene to defend Taiwan in the event of a Chinese invasion.
Musk has said in the past that it would make sense for Taiwan to be a 'special administrative zone' within China. In an interview in Taipei last fall, Taiwan's deputy minister of digital affairs told Vox his government was seeking alternative satellite services to SpaceX because Musk 'could cut the service [over] his personal opinion, so we don't think this was a trustable partner.'
Musk has spoken out against tariffs in the past, and Tesla has warned it could be exposed to retaliatory tariffs from other governments, but because Tesla has built relatively self-sufficient supply chains within both the US and China, the measures announced by Trump so far may hurt Musk's competitors more than they hurt him.
Still, if US-China trade relations deteriorate further, not to mention the sort of 'decoupling' Rubio advocated as a senator, it's hard to imagine Musk's bottom line won't be affected, or that he won't have something to say about it.
'I cannot imagine the Trump administration actually being fully hawkish on China, until Musk greatly recedes from the scene,' said Stone Fish.
The administration's China policy, on both the economic and national security fronts, is still somewhat of a work in progress, and the hawks may still have their way, as they often did during Trump's first term. A test may come in June when, according to reports, a Trump-Xi summit is in the works, perhaps paving the way for formal trade talks.