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Tesla wants White House to pressure Beijing on behalf of US automakers during Obama-Xi summit

PUBLISHED : Monday, 31 August, 2015, 11:02am
UPDATED : Tuesday, 24 November, 2015, 12:01pm

Electric car maker Tesla is pushing the White House to intervene on behalf of United States automakers during an official visit by Chinese president Xi Jinping next month.

China prohibits foreign car brands from assembling vehicles in the country without a local partner. Chinese automakers do not face similar restrictions in the US.

"China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face [in China]," Tesla spokesman Ricardo Reyes told the Wall Street Journal.

READ MORE: White House should threaten Great Firewall to curb Chinese cyber attacks, experts say as Obama-Xi summit nears

“The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage.”

While Tesla has had some success in China – with one dedicated fan building his own charging network across the country – the firm has faced increased competition in recent months from a number of Chinese-backed electric car start-ups. The recent devaluation of the yuan against the US dollar also makes it more expensive to import vehicles from Tesla's California plant to China.

Chinese video streaming firm and smartphone maker LeTV announced earlier this year that it is developing a smart electric car. The firm has poached a number of engineers from US automakers, including Tesla.

Billionaire Elon Musk's company is also facing competition closer to home. China's Wanxiang Group bought Californian electric car maker Fisker Automotive out of bankruptcy in 2014 and is currently gearing up to restart production.

Barack Obama will meet Xi in Washington in September, the first official state visit by the Chinese leader, who met Obama in Sunnyvale, California in 2013 for an unofficial summit shortly after assuming the presidency.

Economic issues are expected to dominate the agenda, particularly Beijing's devaluation of the yuan and its aggressive intervention in the stock markets.

Obama has also pledged to confront Xi on cybersecurity and alleged Chinese hacking of US businesses and governmental agencies. Experts have called for the US president to publicly threaten the so-called Great Firewall internet censorship apparatus as a deterrent to future Chinese cyber attacks.