Elon Musk, the CEO of Tesla, expressed concern about the growing tension between the US and China, particularly regarding the status of Taiwan.
Musk said that everyone should be worried about the issue, as it could negatively affect the global economy, with China being a crucial part of it. Musk also noted that Tesla relies on Taiwan Semiconductor to produce processors, a company that Apple also uses.
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.