Chinese Media Makes Surprise U-Turn On Tesla, Now Claims Shanghai Expansion Is “Going Smoothly”

Something strange is going on in the world of Elon Musk, Tesla and China.

As we noted earlier today, Musk’s public about-face on bitcoin due to its “environmental impact” over the last 24 hours has baffled many people, including almost all bitcoin enthusiasts who praised Musk earlier this year for accepting the cryptocurrency as payment for Tesla vehicles. 

Now, as Tesla has sunk to its worst week since the pandemic-induced sell off of early 2020…

…another surprise reversal has caught the eye of investors.

We have been documenting what has appeared to be an ongoing spat between Tesla and the Chinese Communist Party over the last month, apparently (at least publicly) catalyzed by a protestor at the Shanghai Auto Show alleging faulty breaks on Tesla vehicles. This led to intense shaming by Chinese media, who called Tesla’s handling of the situation a “blunder” and suggested it could “inflict serious damage” on Tesla with the Chinese market. 

But on Thursday, all of that seemed to shift yet again, as the Global Times published a piece stating that “work at Tesla’s Shanghai Gigafactory is going smoothly,” just days after it was reported that Tesla was halting its expansion in China, seen as key to its plans to export from its Asia headquarters. 

“A Global Times reporter visited the site across the road from the Tesla factory and found workers there were busy grading the land and laying cement,” the report says, rebutting claims from Reuters that Tesla had decided to halt plans to expand in Shanghai. “According to a worker on the site, the land is expected to be completed in a month, possibly for parking new Tesla cars that come off the production line.”

One construction worker told the Global Times: “Several expansion projects in the park are being carried out simultaneously, and the expansion project for the plant’s phase two construction is at the stage of ceiling planking.”

“The construction is approaching the end, and the workload has been reduced,” another said.

And despite the fact that Tesla sales dropped more than 27% in April from March, it appears the CCP mouthpiece is intent on letting the world know that things are, once again, status quo. “Analysts said that the overall development of Tesla in China is still on a normal track,” the report said. 

“As long as Tesla can really listen to the voice of consumers, effectively resolve product disputes, and fully respect the Chinese market, it is believed that the current month-on-month decline is only temporary,” analyst Feng Shiming said. “The establishment of Tesla as a wholly owned auto factory in China has given Tesla amazing sales and profits under China’s commitment to open up to foreign investment.”

The change in attitudes is baffling in and of itself. But alongside of Elon Musk’s bold new stance on bitcoin, it is sure to raise tons of new speculation as to what could be going on behind the scenes between Musk, Tesla and the Chinese Communist Party. For now, it appears that once again Musk may have somehow skirted disaster in the world’s largest auto market.

We’ll see how long it lasts.