Tesla Inc. TSLA CEO Elon Musk has once again stirred controversy with his social media activity, and this time it could have implications for his company’s business in China.
What Happened: On Monday, Musk posted a video on X that featured a parody of an AI fashion show. The video included Musk, Bill Gates, and other prominent figures, as well as a brief appearance by Chinese leader Xi Jinping.
In the video, Xi is seen wearing a robe with a cartoon bear that resembles Winnie the Pooh, a character that has been used to mock the Chinese leader for over a decade. In 2013, Xi was the subject of memes comparing him to Pooh after a photo surfaced of him walking next to then-President Barack Obama, whom people likened to Tigger.
The use of this character is a sensitive issue in China and has previously led to international incidents, such as the blocking of HBO after an episode of John Oliver‘s show made fun of Xi’s alleged sensitivity to the character, reported Business Insider.
China is a crucial market for Musk’s company, accounting for 22% of its total revenue in 2023. Musk has been actively expanding Tesla’s operations in China, including a deal to roll out autonomous driving software in the country.
However, Musk, who is outspoken on free speech issues, often takes public risks. For example, he swore at advertisers during a conference, accusing them of trying to blackmail him.
Despite the potential risks, Musk has a history of taking public stands on issues such as free speech, and it remains to be seen how this latest incident will affect Tesla’s business in China.
Tesla did not immediately respond to Benzinga's request for comment.
Why It Matters: Musk’s recent post is not an isolated incident. Over the weekend, Musk shared an AI-generated video featuring global figures like Mark Zuckerberg in a reptilian skin suit, poking fun at conspiracy theories. This video was part of an AI fashion show created by the YouTube channel "Interdimensional TV."
Moreover, Tesla’s future in China is already under scrutiny. Analysts have raised concerns about the feasibility of Tesla’s robotaxi technology in China due to national security risks. Morgan Stanley analyst Adam Jonas recently reiterated an Overweight rating on Tesla but noted significant uncertainties regarding its operations in China.
Tesla is also facing internal challenges in China. The company has been cutting jobs in the country amid increasing competition in the electric vehicle market. Recent layoffs have affected various departments at Tesla’s Shanghai plant, which is responsible for over half of the company’s global production.
Meanwhile, Tesla is preparing to report its second-quarter financial results. Analysts expect Tesla to report second-quarter revenue of $24.93 billion, according to data from Benzinga Pro.
Price Action: Tesla stock closed at $251.51, up 5.15% on Monday. In after-hours trading, the stock increased slightly 0.04%. Year to date, Tesla’s stock has risen 1.24%, according to data from Benzinga Pro.
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Photo courtesy: Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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