Elon Musk meets with China's foreign minister: Top takeaways

Yahoo Finance Live reporter Pras Subramanian discusses Elon Musk's latest visit to China, as well as Tesla's presence in China compared to Chinese EV makers.

Video transcript

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- Tesla shares ending the day up just about 4%, as Elon Musk makes his first trip to China in three years. The high stakes visit consisted of meeting with the Chinese foreign minister who told the press afterwards that Musk is keen to keep close ties to the country. Yahoo Finance's Pras Subramanian, joins me now with more. And we know, Pras, obviously China critical here to Tesla's success at least in the near term.

PRAS SUBRAMANIAN Yeah, I was surprised to hear that it's been three years since he last visited. There was that time he went to visit the opening of the factory and did that dance on stage. But obviously, China very important to Tesla, it's their biggest, it's their biggest factory by volume. They sold over 20% of their cars there. It's a big deal. And over half of the cars are exported from there to other markets. So China a big factor for them in their success story.

He met with government officials today, talking about how he opposes decoupling the US from China, that term that a lot of companies and people are talking about. Do we want to, do companies want to remove operations go to other places like India, like you mentioned, Vietnam, places like that.

Musk saying that China is very important. He wants to double down. They want to expand production in Shanghai, they want to build a mega factory, a big battery factory there. So that's another big thing they want to do. So like I said, more than half of global deliveries from Giga, Shanghai. Tesla is there to stay.

And, of course, there's all the permutations of having Twitter, Twitter not legal in China Musk has been fairly quiet on it since he arrived in China. He'll probably be there for the rest, for a few more days and visit that factory there.

- Yeah, that's the other angle to the story here. But Pras, when it comes to Tesla and the success there in China, we know that the company has been facing some pressure here from Chinese EV makers, obviously also engaging in a price war of sorts over there trying to get more widespread adoption. Where does Tesla stand when you compare it to some of those Chinese EV makers.

PRAS SUBRAMANIAN They've been losing market share. They were once the top EV seller in China, they're, I think, they're down to 10% now in the overall market. BYD, Li Auto, NIO, all those guys are coming up on them. BYD in particular with their range of hybrids and then soon to be new EV eating into that new clean energy market for them.

So it's still an important market but very competitive. And they really need that gen three, I guess, cheaper robotaxi vehicle that they've been talking about to build that, I think, in Mexico and also China to address the concerns of affordability for the Chinese market. Because it's so advanced there, you can buy a 10,000 REV. I mean, it's wild.

- Yeah, certainly. We've seen that the focus point of a number of analysts notes here over the last couple of months. All right, Pras. Good stuff. Thanks.