Tesla’s geopolitical risks

Disclaimer: this is not investment advice. Before taking any investment decision, do your own research.

2022 has changed the landscape for Tesla. Before Russia’s invasion of Ukraine, the relation between USA and China was slowly deteriorating, but didn’t seem like a problem for companies’ production. But in the last year we’ve seen several negative developments:

• China has seen what exercising military muscle may look like and has shown concern.
• US banned Huawei and ZTE sales on national security concerns.
• Power has concentrated on the Chinese communist party, which may move the country into a more authoritarian path, making it less market friendly (not always, but power concentration usually makes governments more authoritarian and capricious.)

Because of these factors, it makes sense for Tesla to stop investments in China and look for another location nearby with similar advantages (though China is a tough country to compete with.) This is why it doesn’t surprise me that Tesla may be looking for locations in Indonesia and other East Asia countries.

Hopefully this is just a temporary fear. The world needs more cooperation and healthy competition, less confrontation, nationalism and warmongerers.