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China pro/con turned political

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ZachF

Active Member
Mar 31, 2016
3,464
40,008
Park City, UT
Could be that the Pollution Reduction Act in the US has shifted focus to North America for the near future. Ramping faster in America makes good sense from my perspective. Even if ramping in Europe and China will be somewhat slower.

Tesla should not increase capacity (beyond zero capex efficiency improvements) in China until Giga Shanghai is no longer enough to supply the local Chinese market.

Xi is taking China down the same ruinous path Putin has taken Russia. Some people here are really sticking their heads in the sand to the rapidly growing geopolitical risks of doing business in China.

Putting a penny more of capital in China than you absolutely have to these days is foolish.
 
Tesla should not increase capacity (beyond zero capex efficiency improvements) in China until Giga Shanghai is no longer enough to supply the local Chinese market.

Xi is taking China down the same ruinous path Putin has taken Russia. Some people here are really sticking their heads in the sand to the rapidly growing geopolitical risks of doing business in China.
I agree we need a Giga announced in Asia outside of China.

That said, I am optimistic that things will calm down post elections in China. I am not sure of what Xi's motivation at this point are outside of staying in power, but I assume that he is interested in China continuing its economic miracle of the past thirty years and China would not manage that if trade with the EU and USA collapsed. All would suffer then, with possibly China and Xi the most in the form of an angry and hungry population demanding change. Historically speaking, sane rulers of China try to avoid that.

Of course, we are living in interesting times....
 
I agree we need a Giga announced in Asia outside of China.

That said, I am optimistic that things will calm down post elections in China. I am not sure of what Xi's motivation at this point are outside of staying in power, but I assume that he is interested in China continuing its economic miracle of the past thirty years and China would not manage that if trade with the EU and USA collapsed. All would suffer then, with possibly China and Xi the most in the form of an angry and hungry population demanding change. Historically speaking, sane rulers of China try to avoid that.

Of course, we are living in interesting times....

China and Chinese relations are going to get worse until Xi dies. That’s the unfortunate reality.

When it comes to anything other than consolidating power the man has proven himself to be a moron time and time again, and every day more and more upper positions are filled with yes men who tell him his stupid ideas aren’t stupid.
 
Tesla should not increase capacity (beyond zero capex efficiency improvements) in China until Giga Shanghai is no longer enough to supply the local Chinese market.

Xi is taking China down the same ruinous path Putin has taken Russia. Some people here are really sticking their heads in the sand to the rapidly growing geopolitical risks of doing business in China.

Putting a penny more of capital in China than you absolutely have to these days is foolish.
Putin saying how Xi should seize Taiwan with their support in hoping to have some additional support back was meant with silence and a plea for de-esclation .

But hey the US media and government is sounding the red alert that war is about to break out due to increase production of Chinese jet fighters so..take your pick

Honestly if you think escalation is likely then Tesla investing in China should be the least of your worries. You should prepare for the market of a 50% drop in the indexes is the end result from WW3.
 
China and Chinese relations are going to get worse until Xi dies. That’s the unfortunate reality.

When it comes to anything other than consolidating power the man has proven himself to be a moron time and time again, and every day more and more upper positions are filled with yes men who tell him his stupid ideas aren’t stupid.
It's not always one sided. Both political parties agrees on one thing and is that being tough on China is popular enough to gain votes from both side of the aisle. If there's one thing the democratic and republican agree on is this. So until that changes relationship wouldn't get better either until China changes their entire political system.
 
Putin saying how Xi should seize Taiwan with their support in hoping to have some additional support back was meant with silence and a plea for de-esclation .

But hey the US media and government is sounding the red alert that war is about to break out due to increase production of Chinese jet fighters so..take your pick

Honestly if you think escalation is likely then Tesla investing in China should be the least of your worries. You should prepare for the market of a 50% drop in the indexes is the end result from WW3.
There is a disturbing meme and argument in the air lately that a Global Thermonuclear War involving multiple parties can somehow be managed. I really wonder in whose best interest such ideas are.

It has been a long time since the vast majority of the population has witnessed the horrors of war up close. Everyone seems to be so eager to engage in one. I hope the way that we are all reminded of it does not consist of multiple warheads dropping on all global population centers, not to mention the wholesale nuking of the polar caps.

Singuy, you are quite the optimist to project 50% drops in indexes when extinction is on the table.
 
There is a disturbing meme and argument in the air lately that a Global Thermonuclear War involving multiple parties can somehow be managed. I really wonder in whose best interest such ideas are.

It has been a long time since the vast majority of the population has witnessed the horrors of war up close. Everyone seems to be so eager to engage in one. I hope the way that we are all reminded of it does not consist of multiple warheads dropping on all global population centers, not to mention the wholesale nuking of the polar caps.

Singuy, you are quite the optimist to project 50% drops in indexes when extinction is on the table.
Ha true. Tho one has to question what will be valuable when these type of extinction events happen. Best to invest in bullet, guns, seeds, and solar.
 
Putting a penny more of capital in China than you absolutely have to these days is foolish.

Lol, what makes you think Tesla put a penny of their own capital into Giga Shanghai in the first place? It was all financed by non-recourse debt arranged with 4 Shanghai banks, at below benchmark lending rates, and paid back in full by Tesla in the past year with profits earned during the early operation of that factory.
No, it would be absolutely foolish for Tesla to listen to jingoist arguements like yours and NOT expand in China.
 
Tesla should not increase capacity (beyond zero capex efficiency improvements) in China until Giga Shanghai is no longer enough to supply the local Chinese market.

Xi is taking China down the same ruinous path Putin has taken Russia. Some people here are really sticking their heads in the sand to the rapidly growing geopolitical risks of doing business in China.

Putting a penny more of capital in China than you absolutely have to these days is foolish.

There are potential risks and rewards in any potential location that must be considered before using first principles thinking to make the decision that will likely be most profitable and advance the mission with the least delay.

Tesla has been handsomely rewarded by their decision to go with Giga Shanghai and that is largely why the share price has exploded over 20X. The amount that this has accelerated the mission can only be estimated but I think it's more substantial than many think. And speed is of the essence, both to the mission and to valuation. Risk must always be balanced with reward. Those afraid to take risks never achieve their goals.
 
China and Chinese relations are going to get worse until Xi dies. That’s the unfortunate reality.

When it comes to anything other than consolidating power the man has proven himself to be a moron time and time again, and every day more and more upper positions are filled with yes men who tell him his stupid ideas aren’t stupid.
Your first 2 sentences might be true - but I question your second paragraph. He's definitely doing everything he can to keep China self-sovereign. The statement actually seems more appropriate for other political entities.

I have a friend with a long Canadian political career (he did actual political work, not a "face politician" - Mods are welcome to privately vet my source if that's necessary). In recent years he has been called upon by the CPC leadership multiple times as an independent non-partisan consultant in their deliberations around future direction - but IIRC he was the only representative from Canada, and the only Christian (state religion was one topic). In his direct experience over decades of consultations at different levels, he said he actually has greater freedom of speech in China than in the USA (which surprised me): however, he noted that is ONLY the case if you state what your own view is - you can speak to your personal experiences and your ideas. The second you tell them what they should or should not do, or attack/criticize the Party directly, you lose all credibility and lose your voice - it's a slight distinction: but it takes subtlety and nuance and wisdom to navigate that - something our politicians generally suck at. At the same time, their honor system as a society makes it hard for different levels in the bureaucracy to communicate honestly because they fear offending their superior. His specialty is in leadership training, and has made some headway within certain departments, but doesn't have a strong influence at the highest levels.

Xi and the leadership may look moronic to those that don't understand their presuppositions and goals. While I don't consider myself sympathetic to the CPC (I also had separate former business ties to a company operating in Xingxiang, and had early 2nd-hand accounts of the terrible human rights abuses there before it became public via our CEO who lived there), we must acknowledge that China has been very successful at remaining independent of corporate/international influence and rising to a Superpower economically (and militarily on paper, at least - I hope we don't have to find out).

They are terrified of the loss of so-called "family values" > just as much as many Americans are; they are aware of the destructive and controlling aspects of corporate-controlled capitalism, and how US politics is owned by megacorps who have been lying, cheating, and stealing from the people for decades upon decades (as TSLA shareholders, we have seen first-hand the manipulations and corruption). Xi has done a remarkable job of keeping corporations from controlling the government there - at the CPC's heart there is a "noble idea" that happens to be our Western blind spot.

Pre-Mao, China had been one of the poorest nations in the world, with unbelievable poverty - it traumatized the country. There is still a lot of poverty (as there is in the USA), but as a nation they made massive strides. Under Xi, they have definitely consolidated power (and ramped up their espionage game - stealing tech is something I don't agree with) - but have avoided the oligarchical power that are rampant in Russia. Xi and the CPC started cracking down hard on corruption about 10 or so years ago, and there has been some progress on that (though the bureaucracy is mind-numbing in business - you need a million stamps on every document... but now there is zero tolerance for bribes, at least in some areas).

And the CPC has a strong green environmental agenda built into their constitution (I'm not 100% sure, but I think that was added at the beginning of Xi's tenure), and China has massively led the world in solar power for decades (both solar power production and manufacturing of panels) - the USA has only just started taking this seriously, and without Musk they'd be even farther behind. And we know that China supports EV's. I believe Tesla will be fine operating there as long as the corporation doesn't try to start grabbing political power or insulting the CPC. Again, honor and respect are keystones: this is what is so foreign to the USA, where honor and respect in politics is nowhere to be seen, and, surprise! we get disrespectful and dishonorable politicians... but China has blind spots, too - but in the realm of a lack of freedom due to the fixation on safety, control, reputation.

We have a lot to learn from each other, but the massive and rising polarization within the USA itself (and the UK) is also creating a rising polarization within global politics. We all need some help, and we could all use some self-reflection.

Chinese self-reflection has been going on behind the scenes as Xi ages - he absolutely knows that things could fall apart when he's gone, but he feels he's holding back the chaos and greediness of the corporate powers and the oligarchs of the world from creating even greater financial disparities (and China has historically gotten the short end of the global stick). Yeah, he probably has a savior complex. But it's worked so far from his perspective, though there are still many complex issues they face. I don't see the same self-reflection in many other countries (it's one disadvantage of short terms - though maybe slightly longer terms would encourage less politicking and more sustainable policies... that's a separate topic) - but I'm hopeful that those who have the real political power in the West (the administrations and committees behind the "faces" of politicians, the ones who do the actual work) are also reflecting on our trajectories...
 
There are potential risks and rewards in any potential location that must be considered before using first principles thinking to make the decision that will likely be most profitable and advance the mission with the least delay.

Tesla has been handsomely rewarded by their decision to go with Giga Shanghai and that is largely why the share price has exploded over 20X. The amount that this has accelerated the mission can only be estimated but I think it's more substantial than many think. And speed is of the essence, both to the mission and to valuation. Risk must always be balanced with reward. Those afraid to take risks never achieve their goals.
We have seen now with hindsight giga shanghai has been Teslas best performer by far, with ramping speed 2x faster than Berlin and Texas and hitting profitability and having the highest margins at record time. Honestly over 50% of the rise in stock price can be attributed to Shanghais execution as it changed sentiment of Tesla from being this constant F up everything they touch to now others will have a hard time catching up.

But yeah..F china..aim I right?
 
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re: China/Xi discussion

Tesla has to sell BEV everywhere there is ICE. And renewable energy+storage everywhere there is coal-fired power... etc.. That includes Russia and China. There is no "you can't have Teslas until you bend the knee to the Tiny Empire." We need fossil fuel pollution to be removed from the atmosphere all over the planet. Not just inside the national borders of the Tiny Empire.

Russia, India and China have 38% of the world's population. (USA = 4%) Probably just as much pollution. Too big for narcissistic imperialism to ignore.
 
Putin saying how Xi should seize Taiwan with their support in hoping to have some additional support back was meant with silence and a plea for de-esclation .

But hey the US media and government is sounding the red alert that war is about to break out due to increase production of Chinese jet fighters so..take your pick

Honestly if you think escalation is likely then Tesla investing in China should be the least of your worries. You should prepare for the market of a 50% drop in the indexes is the end result from WW3.

There is a gigantic chasm between relations continuing to get worse as China becomes more and more authoritarian, and WWIII. I honestly think it’s unlikely China will invade Taiwan, especially considering how disastrous Putin’s Ukraine venture has gone… but they keep threatening to.

It's not always one sided. Both political parties agrees on one thing and is that being tough on China is popular enough to gain votes from both side of the aisle. If there's one thing the democratic and republican agree on is this. So until that changes relationship wouldn't get better either until China changes their entire political system.



China’s favorability has been collapsing worldwide ever since Xi started his idiotic “wolf warrior” diplomacy, which can be summed up basically as “be an a-hole to everyone, all the time”.


It has only gotten worse as Xi imprisoned ethnic minorities into concentration camps, Hong Kong was sacked, fascist dictatorships invading their neighbors are supported, and all the worst episodes of Black Mirror are brought to life in China’s dystopian surveillance state.

Democracies in general are getting sick of funding fascist dictatorships that threaten to (or just do) invade their neighbors, and use that money in general to subvert or destroy Democratic institutions worldwide.

Trade and technology barriers will continue to increase. Xi will continue his authoritarian expansion. It’s unfortunate, but it’s what’s happening.
 
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Lol, what makes you think Tesla put a penny of their own capital into Giga Shanghai in the first place? It was all financed by non-recourse debt arranged with 4 Shanghai banks, at below benchmark lending rates, and paid back in full by Tesla in the past year with profits earned during the early operation of that factory.
No, it would be absolutely foolish for Tesla to listen to jingoist arguements like yours and NOT expand in China.

LOL

China and Russia are the most jingoistic major countries in the world right now. It’s not even close.

They are literally telling you to your face they will use your money to subvert your institutions and build armies designed destroy you, and you want to give them more and more! 🤣
 
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I'm looking for a place to put this post I already put elsewhere, and this seems like a somewhat relevant thread. Here goes:

China information video maker Serpentza did an interesting piece on yet more China corruption, this time about EV ponzi schemes possibly setting up to cause undue environmental damage:

China is Throwing Away Fields of Electric Cars - Letting them Rot!
<https://odysee.com/@serpentza:5/china-is-throwing-away-fields-of:b>

He says to "look past the facade". I've been saying if Elon Musk and/or Tesla want to be taken seriously, they need to cut ties with CCP & China.

Yes, you (Tesla, Elon Musk, and SpaceX) heard me right. Do soft rampdown of relations with CCP & China by repatriating secrets from China Tesla factories, do a sensible rebranding of those cars, then sell the factories (hopefully to a small competitor that can properly take care of the factories without having the ability to do super gradiose plans). Otherwise, using a metaphor, this will be like a necklace of radiation hanging around your neck, looking pretty and poisoning you. You can argue that life is good until you die and that "there's not enough radiation to kill me yet", but until you get out the radiation counters, you don't know how poisonous this China is to you. But China is definitely holding down SpaceX and many other Elon Musk projects, so at some point, Elon might go in a rush to drop China (and by extension, Tesla, if the "independent" (i.e., in the pocket of CCP) board complains too much). Would you like that rollercoaster? Just try it! Or better yet, cut ties with CCP, and therefore with all China facilities now, while you still can do a soft rampdown with as peaceful a pathway as possible. That's my considered suggestion, something I've been thinking about ever since before we heard Tesla was considering making international factories.

Disclosure: Although I am embarassed to say this, my financial situation is not great, so am currently not a TSLA share holder, although I have been and wish I were now, and had I followed my initial investment plan to the letter which I recommended to others to do here in the past, I would obviously be very wealthy now and so would anyone who took my advice, so I don't exactly know how investors feel about this, but I bet some might express some type of concern about this albatross of CCP attached to Tesla.
 
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