The Wall Street Journal: The Lessons of American Companies in China Are Repeating, and the Future May Not Be Yours

The Wall Street Journal reported on July 9 that the localization rate of Tesla's Shanghai factory has surged to 95%, with only 5% of parts for the Model 3 and refreshed Model Y coming from abroad. The Chinese supply chain has deeply penetrated Tesla's "car-making DNA." This figure was just 30% when the first batch of locally produced Model 3 rolled off the line in 2019; now even advanced components such as 12nm process autonomous driving chips and steer-by-wire systems are supplied domestically.

The 2025 U.S. Chamber of Commerce Report on American Business in China reveals that 21% of American companies operating in China no longer view it as a top investment destination, a proportion that has doubled since before the pandemic. Although there have been constant rumors that Elon Musk halted the expansion of the Shanghai factory due to the tariff war, internal data shows that this factory contributes 58% of Tesla's global production capacity, with costs 34% lower than in the United States, and its strategic core position remains unchanged.

In the context of Sino-U.S. trade tensions, over 40% of Tesla's 33.1 billion yuan R&D investment in 2024 is used for local technological innovation in China. A team of 2,000 people at the Shanghai R&D center has developed customized solutions such as intelligent air suspension for Asia. This deep integration has created a "48-hour rapid response" mechanism, reducing the production cycle of Model Y to 45 seconds per vehicle, 37% faster than the Berlin factory.

"China is undergoing three major transitions: service economy, digital economy, and green and low-carbon development," said Xu Lin, chairman of Sino-U.S. Green Fund. "This could have provided American companies with cooperation opportunities, but restrictive measures have instead caused American companies to lose the Chinese market." He warned that the U.S. "small yard, high wall" strategy is counterproductive: the more restrictions there are, the broader the coverage of China's innovation and import substitution will be, ultimately leading to loss of market share for American companies.

Facing a 100% tariff on electric vehicles from China, Tesla has suspended cross-border transportation of key components for the CyberCab driverless taxi, replacing original U.S. imported parts with motors from BYD and drive bridges from Jingjin Electric. This "chain substitution" is reshaping the global supply chain layout, verifying a new reality for American companies' development in China: when China's industrial chain completes its rise, the tutor will eventually become the rival.

When Tesla's Shanghai factory produces energy storage equipment at a rate of 1.2 cells per minute, and when CATL batteries account for 70% of Tesla's global supply, Musk's exclamation six years ago that "China is the future" is revealing another meaning: this future is redefining global industry rules with Chinese standards, Chinese speed, and Chinese technology.

The report by the American Chamber of Commerce in China has already warned: 63% of American companies operating in China list the tension in Sino-U.S. relations as their top challenge. Now, on this thorny path, Tesla and others must learn new survival rules — from technology inputers to ecological co-creators, otherwise the lessons of Motorola and Apple will inevitably be repeated in the era of electric vehicles.

Original article: https://www.toutiao.com/article/1837142097186827/

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