- Morgan Stanley analyst Adam Jonas thinks Tesla CEO Elon Musk might be taking matters into his own hands to dodge the immediate effects of a Trump trade war.
- Musk could be looking to cut a deal with China on imported Tesla vehicles while the carmaker is building a new factory in Shanghai.
If there’s one thing that the Age of Trump seems to have taught everybody in politics and business, it’s that transactionalism is in. If longstanding rules are being reworked, ignored, or outright broken every day, then you need to make your own luck.
This might have been the secret mission of Tesla CEO Elon Musk during a recent no-so-secret visit to China, where he broke ground on a new Tesla factory in Shanghai and also met with Chinese Premier Li Keqiang. The factory will take years to complete – but what is Tesla getting out of the deal right now?
In a research note published Thursday, Morgan Stanley analyst Adam Jonas offered an intriguing take on Elon in China.
“Tesla has proprietary EV and battery technology and is willing to transfer its valuable physical production assets to assemble its vehicles in a wholly owned plant in Shanghai,” he wrote.
“In our opinion, Tesla may have some negotiating power to secure more favorable (or less unfavorable) trading parameters for the import and sale of its EVs in China while the plant is being ramped up.”
Musk is already cutting China deals
In the midst of a US-China trade war that compelled Tesla to lower prices on vehicles it makes in the US and sells in the Middle Kingdom, Musk could stand to cut some deals – especially, as Jonas noted, if Musk wants to sell a lot of Model 3 vehicles in the country.
In fact, he already has cut one good deal. The Shanghai Gigafactory will be the first Western plant in China that isn’t the product of a joint venture with a Chinese manufacturer. So if Musk is angling for an open-ended tariff break, regardless of what the Trump administration does, then he might have realized that Tesla is better off going it alone.
Tesla shares were trading up by 2% on Thursday, to $345.