Musk's comments highlight the potential implications of the escalating tension between the US and China
In an interview Tuesday with CNBC’s David Faber following Tesla’s annual shareholder meeting, Musk emphasised that the official policy of China is to integrate Taiwan, and he urged people to take China's words seriously.
Faber asked Musk if he believed that China would take control
of Taiwan, to which Musk replied that the official policy of China made it
clear that Taiwan should be integrated. He also said that the Chinese
economy and the rest of the world economy are interdependent, like conjoined
twins, and it would be nearly impossible to separate them.
Musk
further added that it would be worse for other companies than for Tesla if
China took control of Taiwan, citing the example of iPhones, which rely on
Taiwan Semiconductor to produce processors.
Tesla currently produces vehicles in Shanghai and operates
other factories in California, Texas, and Germany. However, Musk mentioned
that there are some constraints on the company's ability to expand in China,
and they are making as many cars as possible to meet demand. He clarified
that it is not a demand issue but rather a production limitation issue.
Apple,
on the other hand, has begun assembling the iPhone 14 in India to reduce its
manufacturing reliance on China. Tesla, like Apple, depends on Taiwan
Semiconductor to produce processors, and it is unclear how a potential
conflict between China and Taiwan would impact their production.
Musk's comments highlight the potential implications of the
escalating tension between the US and China. His concerns reflect the
interdependence of the global economy, especially for companies like Tesla
and Apple, which rely heavily on Chinese suppliers. The situation also
underscores the importance of diplomacy to prevent a potential conflict that
could have far-reaching implications.
