Elon Musk has revealed a little-known episode from Tesla's negotiations with Chinese officials before the company built its Shanghai Gigafactory. According to Musk, some officials shouted at him so aggressively that they were practically spitting in his face, insisting that Tesla must "marry" a Chinese partner.
Musk's response? He told them Tesla was still a baby—and babies shouldn't get married.
The unusual exchange, which Musk recounted on Friday, November 6, during the 33rd Annual Baron Investment Conference, offers a rare glimpse into how Tesla managed to become the first foreign automaker allowed to operate a wholly owned car factory in China.
"Babies Shouldn't Get Married"
During an interview with prominent investor Ron Baron, Musk discussed several of his ambitious projects, including Tesla's Terafab semiconductor initiative, SpaceX's Starlink satellite network, and Tesla's Optimus humanoid robots.
But one of the more revealing moments came when Baron asked how Tesla had persuaded Chinese authorities to let it own 100% of its Shanghai factory.
For decades, foreign automakers entering China had been required to form joint ventures with Chinese companies, often surrendering half of the ownership and significant control over their operations.
Baron pointed out that Tesla had received unusually favorable treatment because Chinese authorities were so eager to bring the company to China.
Musk then described what had happened behind closed doors.
He said Tesla had spent years negotiating with Chinese officials before the Shanghai factory became a reality.
Some officials, he recalled, became furious and insisted that Tesla find a Chinese partner.
Musk described them as yelling at him, with spit flying, demanding that Tesla "marry" a Chinese company.
His answer was both humorous and firm.
He told them that Tesla was still a baby company, and that babies shouldn't get married.
He even joked that it would look ridiculous to see a baby walking down the aisle at a wedding.
The officials pushed back, telling him Tesla was not a baby.
Musk insisted that it was—and that babies were simply too young to marry.
Eventually, he said, Chinese authorities agreed to change the rules, allowing Tesla to establish its Shanghai factory without a Chinese joint-venture partner.
Why Musk Refused to Give Up Control
For Musk, the issue was not simply about retaining profits or ownership. It was about preserving Tesla's ability to innovate.
He explained that a company needs to make decisions quickly, especially when developing new technologies.
In a joint venture, however, major decisions often require approval from the Chinese partner, potentially slowing innovation and limiting the foreign company's independence.
As Musk put it, innovation becomes difficult when a company does not truly control the steering wheel.
Tesla's Shanghai Gigafactory began production in October 2019, becoming China's first wholly foreign-owned automobile manufacturing plant.
The factory marked a major departure from the ownership restrictions that had governed China's automotive industry for more than two decades.
The Bigger Picture: CCP's Forced Technology Transfer Controversy
Tesla's experience highlights a longstanding source of tension between the CCP and foreign companies seeking access to the Chinese market.
For years, foreign automakers were required to establish joint ventures with Chinese partners to manufacture vehicles in China. These arrangements often gave Chinese companies access to foreign technology, expertise, and manufacturing know-how.
Critics argued that the CCP used access to China's enormous consumer market as leverage to pressure foreign businesses into transferring valuable technology.
The issue became a major focus of U.S.-China trade tensions during President Donald Trump's first administration.
In March 2018, the Trump administration released the findings of its Section 301 investigation into China's technology transfer, intellectual property, and innovation policies.
The investigation identified Chinese government practices that pressured American companies to transfer technology as a condition of doing business in China.
Under mounting international pressure, Chinese authorities announced plans in 2018 to gradually remove foreign ownership restrictions in the automotive industry.
However, a November 2018 update from the Office of the United States Trade Representative concluded that despite some regulatory changes, China's unfair technology transfer policies and practices largely continued.
The European Union Chamber of Commerce in China also warned at the time that the new automotive policies might not necessarily free foreign manufacturers from existing joint-venture pressures. Instead, the changes could leave some companies under greater pressure to remain in partnerships with their Chinese competitors.
Tesla ultimately secured the right to build and operate its Shanghai factory independently.
Musk's newly disclosed account adds a colorful personal dimension to that breakthrough: When Chinese officials demanded that Tesla get married, he simply insisted that his company was too young for marriage.
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