• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » How China Bent Over Backward to Help Tesla When the Virus Hit

How China Bent Over Backward to Help Tesla When the Virus Hit

How China Bent Over Backward to Help Tesla When the Virus Hit
Source: Bloomberg
March 19, 2020
Bloomberg

After the coronavirus outbreak caused a nationwide shortage of face masks in January, Chinese officials were quick to ensure that Tesla Inc. wouldn’t be left without.

China’s government helped the California-based carmaker secure the sought-after supplies that allowed it to reopen at a time when many of its competitors were still shut down. Tesla received 10,000 masks, cases of disinfectant that require a government permit, thermometers and other materials that allowed the company to restart its factory near Shanghai the first working day after the extended Lunar New Year break, according to state-run media.

The support for Tesla — which also included providing accommodation for some employees as the outbreak snowballed — is emblematic of China’s wider embrace of Elon Musk’s car venture. The billionaire has waged a charm offensive since deciding to build his first plant outside the U.S. in China, home to the world’s biggest electric-vehicle market, and has been rewarded with the support of officials even as the trade war strained relations with the U.S.

That backing is crucial for Musk’s vision to make China a centerpiece of his automotive ambitions, but also serves a purpose for Beijing, with Tesla’s new factory south of Shanghai becoming a symbol of the government’s efforts to open the economy to global competition and be the world’s EV pioneer.

“Given Tesla’s image of having advanced electric-vehicle technology and expected strong demand for made-in-China Tesla Model 3s this year, no local government anywhere in the world would neglect such a new project,” said Yale Zhang, founder of AutoForesight, a Shanghai-based consultancy.

‘All Efforts’

As Beijing pushed local authorities to get the country back to work last month, officials in Lingang singled out Tesla as an example of their success in helping the area’s industry to recover.

The management committee of Lingang “will make all efforts to help key companies including Tesla return to normal production,” Xu Wei, a spokesperson for the Shanghai municipal government, said at a briefing in February. Tesla representatives in China declined to comment on the help it received from authorities.

Tesla has been impacted along with the broader auto sector in China as the virus prompts customers to stay home, causing a historic plunge in car sales. But the support allowed the automaker to recover from shutdowns aimed at slowing the virus’ spread that virtually paralyzed industry in China. A gauge of Chinese manufacturing plunged to a record low in February, according to government data.

Dorms, Transportation

Besides the protective materials, Chinese authorities helped arrange dormitories for hundreds of Tesla employees, as well as transport to and from the plant amid the turmoil. Shanghai Lingang Human Resources Co., a government-backed agency that coordinates hiring in the area, said it has helped Tesla add more than 100 new workers since the outbreak, plus it’s assisted with virus screening and online interviews.

Authorities are also trying to ensure that Tesla’s parts suppliers in China resume production as soon as possible by providing epidemic-prevention materials, Sun Xiaohe, a local official in charge of assisting Tesla, told state media. Catering was also arranged, they reported.

While other automakers such as China’s Zhejiang Geely Holding Group Co. also received masks and other support, the actions to help Tesla have been trumpeted in state media and by local government-backed outlets. Footage of locally built Model 3 sedans being assembled amid the epidemic have proliferated on TV and online.

Even before the virus, a swift regulatory-approval process enabled Tesla to start deliveries to customers in China in January, a year after it first broke ground on the factory.

“The Gigafactory project illustrated the cooperation between Tesla and the Shanghai government, and that the city has improved its business environment,” Wu Qing, deputy mayor of Shanghai, said at a ceremony that saw Tesla hand over its first China-made car.

Chinese Loans

Local banks provided financing for Tesla’s China push, including a $1.6 billion injection announced at the end of last year. The acquisition of land for the plant and a slew of local permits were cleared swiftly, and the factory was hooked to the nation’s power grid quicker than the average for other firms.

As the facility was being planned and local permits were pending, Musk visited China often for meetings with figures ranging from Alibaba Group Holding Ltd. founder Jack Ma to Transport Minister Li Xiaopeng and other government officials. He met with Premier Li Keqiang in Zhongnanhai, the leadership compound next to the Forbidden City in central Beijing where the country hosts its most high-profile foreign visitors. Musk was also photographed eating steamed buns during a visit to the capital last year.

Soon afterward, Tesla obtained an exemption from China’s 10% sales tax on cars. Typically, only electric vehicles made by Chinese companies have been exempt.

“The fact that Tesla received significant government support to overcome the current crisis shows China is delivering its promises to treat foreign firms on equal footing with local ones,” said Ivan Su, an analyst at Morningstar Inc. in Hong Kong.

RELATED CONTENT

RELATED VIDEOS

Sourcing/Procurement/SRM Global Supply Chain Management HR & Labor Management Supply Chain Security & Risk Mgmt Automotive
KEYWORDS Automotive China HR & Labor Management SC Security & Risk Mgmt Sourcing/Procurement/SRM
  • Related Articles

    Here’s How a No-Deal Brexit Would Shock Virus-Hit U.K. Companies

    A Battery Maker Sees Virus as Spur to Wrest Business From China

    China's Hot, But It Won't Always Be. How Will Companies Know When It's Starting to Cool Down?

Bloomberg

Amtrak Bottleneck Turns Biden’s Focus to His Favorite Rail Route

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A MAN IN A SUIT SHAKES HANDS WITH A WOMAN IN A HARD HAT, NEXT TO A STACK OF CONTAINERS

    Three Procurement Technology Evolutions for 2023

    Sourcing/Procurement/SRM
  • DOCUMENTS BEARING THE INSIGNIA OF US CUSTOMS AND BORDER PROTECTION LIE ON A TABLE

    New CBP Regs Call for Greater Diligence by Brokers in Reporting Security Breaches

    Freight Forwarding/Customs Brokerage
  • The blank stare of a child's eye who is standing behind what appears to be a wooden frame

    The Alarming Continued Rise of Modern Slavery in Supply Chains: How Procurement Can Help Reverse the Trend

    Sourcing/Procurement/SRM
  • A WORKER IN A WAREHOUSE, SUPERIMPOSED WITH GRAPHICS SHOWING SUPPLY NETWORK

    Enabling Intelligent Visibility With Supply Chain Analytics

    Data Management (Big Data/IoT/Blockchain)
  • A GROUP OF WORKERS RANGED IN AN OFFICE, OF DIVERSE RACE, GENDER, AGE AND PHYSICAL ABILITY

    Podcast | The Supply Chain Workforce of the Future Is Already Here

    HR & Labor Management

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing