U.S. government “detest” China but American companies can’t leave China alone

US vs China and Chip

Over the past few years, the American government has been talking tough about China. There is a salient trade war between both countries. The U.S. government is restricting Chinese companies from doing business in the U.S. The American government has blacklisted several Chinese companies citing “national security”. If Apple is striving in the U.S. market, it is partly because of these tactics. The likes of Huawei and ZTE can not even do business with American companies not to talk of selling their devices/technologies in China. However, American companies are doing business in China. In fact, Tesla is currently focusing on the Chinese market and plans to further expand production in China.

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Tesla Chairman, Robyn Denholm said that to achieve its goal of producing 20 million cars a year by 2030, Tesla needs to have manufacturing capabilities on every continent.

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“We’re building factories all over the world. Our view is that the world is moving to electric vehicles and lithium-ion batteries, and we need access to all the major markets around the world,” Deholm said after a speech at Australia’s National Press Club on Wednesday.

Following the Shanghai and California factories, Tesla recently opened factories in Berlin, Germany and Texas, USA. After upgrading the production line and getting rid of the impact of the epidemic on production, Tesla’s China business has resumed full production. Tesla delivered 76,965 Chinese-made versions of its cars in August, slightly down from a record 78,906 in June.

Tesla wants cars on every continent

De Homem points out that it’s important to have cars on every continent, “because when you’re building a long-term supply chain, you want the cars to travel as short a distance as possible before they’re delivered to the owner, and that includes shipping and ocean shipping because all of these processes will increase carbon dioxide emissions.”

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According to Tesla’s goal, by 2030, the company will produce 20 million electric vehicles a year. This is well above the production of just under 1 million in 2021. With a production line upgrade at the Shanghai plant alone, Tesla has doubled the plant’s annual production capacity to about 1 million vehicles.

American companies can’t stay away from China in terms of manufacturing. There are several reasons for this. American companies get most of their components from China. Thus, it makes no sense for the factory to be far from the supply chain. Also, China has cheap labour which is not so cheap these days.

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