Elon Musk thinks the next Tesla CEO could be Chinese. It's a good bet.




 

On Jan. 7, just outside Shanghai, Elon Musk broke ground for Tesla's "Gigafactory 3." Behind the stage where he made the announcement, there was nothing to see but a wet, muddy flat. By the end of the year, if all goes as Musk plans, there will be a glitzy new factory making electric cars, ramping up to an annual production of 500,000 cars within the next few years.

It would become the first fully foreign-owned car factory in China, and Tesla's first factory outside the US. The company plans to sink as much as $5 billion (paywall) into the factory, and expects to recoup that investment by selling the cheapest versions of Tesla's Model 3 and Model Y to the world's largest market for electric cars. The factory will also insulate Tesla against the vagaries of the trade war.

The most interesting thing to me, however, was a seemingly throwaway remark Musk made at the ceremony. "Somebody who joins today as a junior engineer in Tesla China could one day be CEO of Tesla worldwide," he said (paywall). "They could have my job one day maybe."

You could dismiss the comment as hyperbole-just Musk trying to signal to talented, young Chinese engineers that Tesla's the place to be. But, even if he didn't truly mean it, Musk may have stumbled into making a prophecy.

No one knows exactly how many electric-vehicle makers China has, but the number is likely to be in the hundreds. A Quartz analysis shows that, in 2018 alone, at least 84 automakers were actively selling electric cars. Almost all of these have Chinese nationals as CEOs, and some of them have confessed that Tesla was the inspiration for their company.

Want to learn more about the future of electric cars in China? Check out Quartz's field guide.

Moreover, by spending $60 billion in government subsidies for EVs over the last decade and creating regulations to restrict the number of gasoline-powered cars on the road, China's government has firmly created a market for electric cars. Bloomberg New Energy Finance estimates China will sell more electric cars than any other country in the world until at least 2030-the furthest its projections go.

So unless the brand suddenly loses its appeal, Tesla's growth story will likely be tied to the growth story of China's electric-car market. That growth will be accompanied by more and more Chinese nationals gaining expertise in the industry. In other words, whatever Musk truly believes today, he may be right: the chance that the next candidate to replace Musk is Chinese is quite high.

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