Elon Musk could be a bridge between the U.S. and China — but for which country’s benefit?

Eunice Yoon, CNBC

Sun, Mar 16, 2025, 5:00 AM 7 min read

SHANGHAI — With billionaire tech executive Elon Musk busy upending the U.S. government with deep cuts as the Trump administration slashes the federal workforce, one of the companies that helped him build his fortune has reached a new milestone in China.

Musk's electric vehicle maker Tesla now has two facilities in Shanghai. Along with the nearby Gigafactory, Tesla’s first production center outside the United States, the new $200 million Megapack battery plant that opened last month is critical to Musk’s continued success in China and beyond.

The Gigafactory produces 1 out of every 2 Teslas in the world, or about 1 million cars a year. In addition to producing for the Chinese market, it exports cars to Europe and other parts of Asia, though not yet to the U.S.

Musk’s cars have been credited with helping China to create an EV industry that now leads the world. In exchange, China has become Tesla’s biggest market outside the U.S.

“China is absolutely central to the success story of Tesla globally,” said Michael Dunne, chief executive of the San Diego-based advisory service Dunne Insights. “Take China out of the picture, we have a completely different Tesla.”

That is exactly the problem.

Through Musk’s work with his Department of Government Efficiency, or DOGE, he has gained tremendous sway over the U.S. government, even as he retains substantial financial interests in China, which the U.S. considers its main strategic competitor.

With his role as a Trump adviser and his high profile in China, where he has met with senior leaders including the foreign minister, Musk has been held up as a potential bridge between the world’s two biggest economies. But it remains unclear to whose advantage that will be.

“It would be very striking and unlikely if Beijing doesn’t see this as a great gift,” said Isaac Stone Fish, chief executive of Strategy Risks, a research firm based in New York.

“Beijing is long used to using what it calls friends, the technical Chinese term for ‘useful idiots,’ for folks who can advance the interests of the Communist Party,” Stone Fish said. “Beijing is very used to using people like Elon Musk to do that.”

Though Musk is widely admired in China as an innovator and businessman, his fortunes here could also shift rapidly if U.S.-China relations sour and the public begins to associate him more with Trump administration policies.

The White House, DOGE and Tesla did not respond to requests for comment.

The White House has said Musk’s cost-cutting initiative is unrelated to U.S. foreign policy, while the Chinese Embassy in Washington says the U.S. business community has long been a “staunch force” for U.S.-China relations.