Elon Musk Seeks Support from European Leaders as Twitter’s Fate Remains Uncertain

Elon Musk paid a visit to Italian Prime Minister Giorgia Meloni at the Palazzo Chigi in central Rome on Thursday. The two engaged in several lengthy meetings, during which they shared wine, hugs, and casual conversation. However, the billionaire did not make any commitments or reveal any information about the potential location of Tesla Inc.’s upcoming European factory.

Musk then traveled to Paris to meet with French President Emmanuel Macron – their second meeting in just over a month. EU leaders are scrambling to win over the world’s richest man as billions are at stake in potential investments. France and Italy are not his only suitors: Tesla is also said to be negotiating a factory in Spain.

While his meetings with leaders across the political spectrum have largely focused on Tesla, the backdrop has been another Musk company: Twitter, whose collapse in moderation standards has jeopardized its future in Europe.

This charm offensive also comes as Musk’s only factory on the continent, outside Berlin, has grown more slowly than expected due to opposition from environmental groups and Germany’s heavy bureaucracy. These complications have led some to speculate that he is looking for a more favorable location for his next local plant. While it’s unlikely he’ll need one for Tesla’s existing product lines, the company is working on the next generation of more affordable electric vehicles.

Musk’s top-level meetings have not always gone smoothly. In between discussions about artificial intelligence and the car industry in Italy, the father of 10 expressed his concern to Meloni about the country’s low birth rate. In France, the discussion about a possible battery factory has been overshadowed by a Twitter controversy. Just three weeks ago, Macron’s digital minister warned that if the social media giant did not comply with the EU’s new content control rules by the end of August, it would face fines and eventually a possible EU ban.

All this is happening at a time when European leaders are particularly keen to attract investment. Clean-tech incentives in President Joe Biden’s landmark climate bill, the Inflation Reduction Act, are fueling concerns that Europe is falling behind in the race to attract electric vehicle component production.

Italy has struggled to secure commitments from major US technology investors and has held preliminary talks with companies based in Taiwan to boost its chip capacity. Talks with Intel led by former Prime Minister Mario Draghi failed to lead to a deal, and Meloni’s recently announced “Made in Italy” approach is likely to raise questions about why an American company should direct investment to a country focused on prioritizing domestic companies.

At the same time, Macron has tried to attract companies like Twitter by branding Paris as a technology hub. While he has previously criticized Musk for failing to protect children on Twitter, the men have other things to discuss: Tesla has promised to buy nickel from a struggling state-backed plant in New Caledonia, a French territory in the South Pacific. and SpaceX has a contract to launch satellites for Paris-based operator Eutelsat SA.

Above all, Macron’s government has said it wants to attract Musk’s electric car factory to France. The French president is trying to turn northern France, a former industrial stronghold, into a center for the production of electric cars and batteries.

Although Musk has not visited Spain on official business, Socialist Prime Minister Pedro Sanchez invited him last year after calling on the Spanish government – via tweet – to increase its investment in solar energy. Local media reported earlier this month that Tesla is in talks to build a battery factory in the coastal region of Valencia. Neither the board nor the company has confirmed or denied.

Spain has sought to expand its battery and electric vehicle production capacity to compensate for an expected decline in combustion engine cars. VW has announced plans to build a $7.7 billion electric car center in Valencia.

After meeting Macron last month and saying he was “impressed” by the leader, Musk promised to invest in the country soon. But on Friday, when he met Macron again and was interviewed on stage at a technology event in Paris, where he giggled and talked about the meaning of life, Musk didn’t say anything concrete.

Asked about regulators’ push to limit content moderation on Twitter, Musk appeared resigned and unconcerned. “There are a lot of regulators. Sure,” he said dismissively. He later repeated claims that Twitter has made dramatic improvements in curbing child abuse content, contradicting academic research that says the company has regressed. There was no talk of him building a factory in France, a possibility he and Macron had discussed. Scrutiny will be intense when Musk speaks on French television Monday night, as reported by Le Parisien.

Musk has had little trouble securing faces with world leaders, whether in person or virtually. In just the past six months, he has met with the prime minister of Mongolia, several Chinese central government officials, and the presidents of South Korea, Mexico, and Turkey. Indonesia’s President Joko Widodo has openly tried to woo Musk over the past year and get him to manufacture both cars and batteries in the country.

But talk of Tesla’s new factories is a bit of a contradiction, given the significant amount of car manufacturing capacity the company has already added recently. It is now capable of producing more than 2 million vehicles a year – roughly double what it was capable of just over a year ago.

Tesla has struggled to grow vehicle sales as quickly, with production outstripping deliveries in each of the past four quarters. While deliveries of the Model Y have continued to rise, the company’s other models have performed less well. According to researcher Jato Dynamics, sales of the Model 3 in Europe during the first quarter fell by 40% from a year ago.

This mismatch between supply and demand is the reason why Musk massively reduced electric car prices in the US, China and Europe earlier this year. The company is also planning to cut shifts and shed temporary workers at its German factory, Business Insider reported this week.

In a sign Tesla has more inventory issues to deal with, the automaker just started offering three months of free fast charging in the U.S. to clear Model 3 sedans before the end of the quarter.

The idea that Tesla is considering building a battery factory is also somewhat of a surprise, given the challenges of manufacturing its own cells and the decision earlier this year to postpone their production in Germany until further notice.

In September 20202, Musk held an event to promote Tesla’s plans to make thicker, bulkier batteries to supplement batteries it sources from manufacturers such as Panasonic Corp. But compared to what Musk predicted, his company’s actual production has fallen far behind schedule.

“It’s a very difficult road,” Musk said at Tesla’s annual meeting last month, ultimately declining to answer a question about when the company would be able to deliver on what he promised nearly three years ago.