A setback for Tesla in China

Tesla, America’s biggest electric car manufacturer, “is in danger of being relegated to an expensive niche in China because Elon Musk can’t clinch a deal to open a factory there,” according to Bloomberg.

• In June 2017, Tesla signed a preliminary agreement with the Shanghai government to establish a factory to “ensure affordability,” hoping that local plants could cut prices of Tesla vehicles in China by a third.
• However, the two sides have not agreed on the ownership structure of the factory: According to Bloomberg sources, Tesla wants a wholly owned company, but the central government says it must be a joint venture with local partners.
• In 2017, Tesla sold 14,883 vehicles in China, a mere 3 percent of the country’s total electric car sales of 449,431 units.
• “Tesla has no strategic path… It has the halo of Elon Musk, and its products are slightly ahead of the competitors, but the others — especially the Chinese EV startups — are catching up rapidly,” according to an auto industry analyst quoted by Bloomberg.

• Artificial intelligence (AI)
  China’s massive investment in artificial intelligence has an insidious downside / Science
  An excellent roundup of recent developments in AI in China.
• U.S.-China trade tiffs
  U.S. slaps anti-dumping duties on Chinese pipe fittings / Reuters
• Stock markets
  China’s hottest stock is suddenly back in short-sellers’ sights / Bloomberg
  “Short interest in China Evergrande Group tripled in the wake of an HK$18 billion ($2.3 billion) convertible bond issue at the end of January, surging from an almost five-year low.”
  China banks back in vogue as share prices rally / Financial Times (paywall)
• Ecommerce and logistics
  JD.com’s logistics business raises $2.5B from Hillhouse, Sequoia China and others / TechCrunch
• Big oil
  Russia may invest in Saudi Aramco IPO via fund with China / Bloomberg