【Observer Network, Xiong Chaoran】Recently, due to a tax and expenditure bill, U.S. President Donald Trump and billionaire Elon Musk completely fell out, with Trump threatening to expel Musk born in South Africa, while Musk threatened to establish a new political party.
On July 14th, the South China Morning Post reported that the tension between the two has intensified, raising speculations about whether Musk might relocate his business empire to China. “If the tension between Musk and Trump escalates—especially on issues such as regulation, subsidies, scrutiny, or taxes—Musk may transfer more R&D or manufacturing capabilities abroad,” said Denis Simon, a very-often-in-residence researcher at Quincy National Affairs Institute, a well-known American think tank.
“China possesses advanced supply chains and infrastructure, which could become a popular (relocation) destination,” Simon pointed out. “Although Musk cannot fully relocate his business empire to China due to export controls and national security barriers, selective knowledge transfer, symbolic alliances, and manufacturing migration are very likely.”
However, Simon also mentioned that although it seems feasible for Musk to move his electric vehicle business to China from the current perspective, relocating other businesses, especially SpaceX, would be much more challenging. “SpaceX’s role in U.S. defense, satellite communications, and space launch services essentially makes it non-transferable,” he said. “If Musk attempts to transfer critical space technology to geopolitical adversaries, he could potentially be seen as posing a threat to (U.S.) national security.”
On May 30th, Trump and Musk were in the Oval Office of the White House.
Simon believes that China possesses an advantageous electric vehicle supply chain, policy incentives, and consumer base for Tesla. However, transferring all intellectual property rights to China could spark political backlash in the United States, especially concerning patented technology. He also mentioned that Tesla’s operations in China are beneficial for accelerating the development of local electric vehicle companies.
In 2020, Tesla accounted for over 16% of China’s total electric vehicle sales, but this figure dropped to 6% last year as it faced increasing competition from Chinese rivals such as BYD and XPeng.
Zhou Yu, a geographer specializing in globalization and high-tech industries at Wasserschmidt College in the United States, stated that in reality, China has already surpassed the United States in electric vehicle technology.
“Overall, Elon Musk’s words and actions can influence people’s perceptions of China, but he will not change China’s focus on innovation or its environment,” Zhou said. “Transferring R&D to China would be challenging, so he might expand his business in China, but the commercial ecosystem for electric vehicles in China is already mature, so any changes that Musk can make are minimal.”
Moreover, Simon also mentioned other potential issues that Musk’s other businesses may face when landing in China, including Neuralink, a brain-machine interface company, and Boring Company, which is developing the proposed hyperloop transportation network.
“Elon Musk’s concept for the hyperloop is more successful as an inspiration than as a real project,” Simon noted. Although China has long been a leader in the global high-speed rail sector, if Musk truly attempts to build a hyperloop prototype in China, it could still serve as a technological demonstration for future transportation systems.
He added that, regardless of Musk’s future, China could leverage his case and complaints about the American political system to prove that the United States is no longer an ideal environment for disruptive innovation.
“China wants to benefit from this, perhaps not necessarily by Musk’s loyalty or direct investment; it suffices if he is marginalized in the United States, which would strengthen China’s own narrative on technology: China is a stable, innovative center aligned with national development goals, less hindered by ideology,” Simon believes. This signal might target foreign investors, young Chinese scientists currently in the US, or countries seeking non-Western development models.
The South China Morning Post reported that following threats by Trump and other Republicans to expel Musk, some Chinese social media users have welcomed him.
A netizen comment read, “If he doesn’t have a country, China welcomes Musk, and Tesla cars will become cheaper.” Another netizen comment stated, “Then come to China. China will definitely welcome these talented, creative, and innovative individuals.”
Earlier this month, as Trump signed the “Bigger, Better, Cheaper” tax and spending bill, tensions between him and Musk escalated again. On July 1st local time, Trump posted on social media, directly targeting the government subsidies received by Musk’s companies and proposed that the “Department of Government Efficiency” (DOGE) conduct an investigation.
He wrote, “So far, Musk has received more subsidies than anyone in history. Without them, he might have had to shut down and return to his home in South Africa. There would be no rocket launches, satellites, or electric vehicle production. Our country could save a lot of money. Maybe we should let DOGE investigate seriously? It could save us a lot of money!”
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According to The Washington Post, so far, Musk’s business empire has secured $38 billion from government contracts, loans, subsidies, and tax credits.
Simon noted, “Deportation or visa pressure is politically explosive. Musk’s birth in South Africa and Canadian citizenship background theoretically allows him to be deported, but any attempt to deport him would be a legal and political nightmare—unlikely even during Trump’s presidency.”