Elon Musk, Praising China's Climate Efforts, Says Country Will Be Tesla's Biggest Market In Long Run

Elon Musk, Praising China's Climate Efforts, Says Country Will Be Tesla's Biggest Market In Long Run

Tesla Inc. TSLA CEO Elon Musk has praised China’s efforts to fight climate change and predicted that the Asian country will be the electric car maker’s largest market in the long term.

What Happened: In an interview with Chinese state-run broadcaster China Central Television, Musk said he was impressed with China’s huge commitment to a low-carbon economy as set in its latest five-year plan.

He termed China’s commitment to achieving a carbon peak by 2030 and a sustainable energy economy by 2060 as a “very aggressive” and a “great” goal.

Musk also predicted that in the long term, China will become Tesla’s largest market and the place “where we produce the most vehicles and have the most customers.”

The U.S. remains Tesla’s largest market and accounted for 48.2% of the company’s revenues last year.  China made up for 21.1% of the automaker’s total sales and is the company’s second-largest market.

See Also: Elon Musk Says The New Tesla S Plaid Is EV Maker's 'Best Car Ever'

Why It Matters: Musk’s comments come as Tesla faces intense scrutiny in China. It was reported last week that the Chinese government has restricted Tesla vehicle access to military, state-owned enterprises in sensitive industries, and critical agencies over national security concerns.

Suspicions were raised over the car sensors’ ability to record visual images of surrounding locations and Tesla’s indiscriminate data collection over car usage, including drivers’ personal information and mobile phones’ contact list synced to the cars.

Nevertheless, Tesla is preparing to expand its Gigafactory in China. While reporting its fourth-quarter results in January, Tesla said that the Shanghai factory can sustain Model 3 sedan production at or above a run rate of 250,000 per year. Model Y production at the factory started in late 2020 and is in the process of ramping to full capacity.

Price Action: Tesla shares closed about 1.2% lower on Tuesday at $662.16, but rose 0.3% in the after-hours session.

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