Despite being founded in California and presently headquartered in Texas, EV giant Tesla (TSLA) is not as red, white and blue as you might think.
In fact, a significantly large chunk of its delivery and sales come not from its factories in Fremont, California, or Austin, Texas, but from its overseas Gigafactory in Shanghai, China. The Shanghai location is its largest and most profitable.
According to data released by the China Passenger Car Association (CPCA), wholesale sales from Tesla's Shanghai factory, which makes both the Model 3 and Model Y, totaled 249,135 units in the months making up Q3 2024, accounting for 53.8% of the company's total deliveries in the quarter.
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Though Tesla cars are made in multiple places, one key difference between vehicles made in China and those made in the U.S.A. is the source of one key component: the battery. While U.S.-built Teslas can get batteries made by either LG Energy Solutions or Panasonic, Chinese Teslas have local partners such as Contemporary Amperex Technology Co., Limited (CATL), which has been the battery supplier for Shanghai Giga since 2020.
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Though Tesla is a major CATL customer, the battery company's founder and chairman, Robin Zeng, had some grievances with Tesla CEO Elon Musk, which he aired in a recent interview while also revealing a surprising position on the upcoming Trump administration.
Elon Musk doesn't know how to make a battery
In an exclusive interview with Reuters, Robin Zeng revealed that he often talks with Tesla's CEO Elon Musk, even meeting face-to-face during his last visit to Beijing in April.
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Though the two see eye-to-eye on the potential for futuristic AI-powered autonomous vehicle technology like Tesla's Full-Self Driving and Robotaxi, the battery man believes he is a better expert on technology that can enhance Tesla's present viability — batteries.
Zeng told the news outlet he told Musk to his face that his huge bet on 4680 battery technology — an larger evolution of Tesla's cylindrical 2170 battery— “is going to fail and never be successful."
"We had a very big debate, and I showed him," Zeng said. "He was silent. He doesn't know how to make a battery. It's about electrochemistry. He's good for the chips, the software, the hardware, the mechanical things."
Concern around an issue that ultimately hurts Tesla
Zeng also revealed to Reuters reporters that he confronted Musk about his tendency to set unrealistic and unachievable timelines for the rollout of new Tesla products. According to Zeng, Musk revealed that he uses this a tactic to keep Tesla staff focused and motivated, seeing that a deadline beyond a two-year time frame is useless in doing so.
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"His problem is overpromising. I talked to him," Zeng said. "Maybe something needs five years. But he says two years. I definitely asked him why. He told me he wanted to push people."
He did not mention any product by name, but he noted that realistically, he could guess that Musk purposely plays the mental poker game.
"He probably himself thinks it needs five years, but if you believe him when he says two years, you will be in big trouble," he said. "The direction is right."
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CATL wants to work with Trump
As it is a Chinese company, CATL has a limited reach in America, as legislation dictating the content of batteries influences the market.
According to a provision of the Inflation Reduction Act, which took effect on Jan. 1 this year, EVs sold in the United States that contain any parts of the battery that are made or assembled by companies based in, owned or are subsidiaries of those originating from "foreign entities of concern," such as China, Russia, Iran or North Korea (DPRK) are not eligible for any part of the $7,500 Federal Tax Credit.
CATL's most well-known presence in the States is its association with Dearborn automaker Ford; it is constructing the Blue Oval Battery Park, a $2 billion plant that is meant to provide 1,700 jobs.
The Tennessee battery plant has been scrutinized by Republican lawmakers for using technology supplied by CATL. In September 2023, Representatives Mike Gallagher (R-WI) and Cathy McMorris Rodgers (R-WA) demanded documents from Ford and its partnership with CATL and threatened to summon Ford CEO Jim Farley to testify before Congress.
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In a January 2024 letter, the same lawmakers urged the Commerce Department to investigate and impose export restrictions on companies involved with Ford that the lawmakers allege have direct ties to the Chinese Communist Party (CCP), the Chinese military, alleged human rights abuses in the Xinjiang region of China and the government of North Korea.
However these threats proved ... unthreatening. In April, Chinese media reported that General Motors was in talks with CATL to create a facility that mirrors the Blue Oval Battery Park.
The allure of CATL battery technology should not come as a surprise, its latest and greatest new battery boasts a driving range of more than 1,000 kilometers, or 621 miles of range on a single charge.
In remarks to Reuters, CATL CEO Zeng said that he is interested in building a U.S. factory if Trump will allow it.
"Originally, when we wanted to invest in the U.S., the U.S. government said no," Zengsaid. "For me, I’m really open minded."
During his campaign, the President-elect alluded to being open to Chinese firms, if they emphasize U.S. production.
“We're going to give incentives, and if China and other countries want to come here and sell the cars, they're going to build plants here, and they're going to hire our workers," Trump said.
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