Musk recalls that Chinese officials once yelled at him to demand Tesla form a joint venture, before China later changed its laws to allow wholly owned operations
Elon Musk recalled in a conversation with Ron Baron on November 6 that when Tesla was first invited into China, some government officials had yelled at him, spitting as they demanded that Tesla must operate as a joint venture with a local company.
Musk said Tesla rejected the demand and insisted on being wholly owned, adding that Tesla was still a ‘baby company,’ too young to get married. In the end, the Chinese side said that they would change the law, and then Tesla could own the factory.
Tesla became the first foreign automaker to be approved to establish a wholly owned factory in China in 2019, and Gigafactory Shanghai is one of its largest and highest-output factories. Before that, foreign automakers were usually required to form joint ventures with Chinese partners and hold no more than 50% of the equity.
Original source:
Title: Elon Musk says Chinese officials yelled at him to take a local partner... Publisher: Tesla Owners Silicon Valley (@teslaownersSV) quoted Publication date: 2026-11-06 URL: https://x.com/teslaownersSV/status/2118822484346888192 Source type: social media quote (confirmed by the original speaker) Verification status: this reading cross-checked the relevant post and historical facts, verification date 2026-11-06 Supporting content: supports all core indirect quotations in the main text and the description of the joint venture demand
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On November 6, Elon Musk recalled in a conversation with Ron Baron that when Tesla entered China, some government officials had yelled at him and demanded that it must form a joint venture with a local company. Musk said Tesla refused the demand, insisted on being wholly owned, and said that Tesla was still a ‘baby company,’ too young to get married. In the end, China said it would change the law so that Tesla could own the factory.
In terms of policy and market access, foreign automakers had previously usually been required to form joint ventures with Chinese partners and hold no more than 50% equity. Tesla became the first foreign automaker approved to establish a wholly owned factory in 2019, and Gigafactory Shanghai subsequently became one of its largest and highest-output factories. Musk worked closely with then Shanghai Party Secretary, now Premier Li Qiang, to advance the project.
Compared with most foreign automakers accepting the joint venture requirement, Tesla insisted on being wholly owned and ultimately received approval. The similarity is that both entered the Chinese market; the key difference is that Tesla rejected a joint venture and pushed for a legal change, obtaining 100% ownership. This arrangement allowed Tesla to retain full control of the factory while benefiting from local supply chains and export convenience.
For Tesla, the wholly owned arrangement allowed it to retain operational control, and the Shanghai factory became an important export hub. For other foreign automakers, the joint venture requirement remains a common model. For China and the United States, this case reflects China's flexible adjustment of market access for specific foreign companies, but Tesla's wholly owned status in China also leaves it facing talk of separation amid geopolitical tensions.
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- Musk recalled that Chinese officials yelled at him to demand a joint venture, and Tesla insisted on being wholly owned and said it was too young to get married.
- In the end, China changed the law to allow Tesla to build a wholly owned factory, making it the first wholly owned foreign automaker.
- Gigafactory Shanghai later became one of Tesla's largest and highest-output factories.