Elon Musk stunned South Korea and Tesla watchers alike when he popped up final week on a video name with President Yoon Suk Yeol.

Yoon’s workplace launched particulars of the chat, revealing Musk had mentioned he thought of the nation a best choice for funding.

Shares of battery-related firms like Samsung SDI and Posco jumped, regardless that Musk didn’t clearly say he really desires to construct a manufacturing facility within the nation.

Yoon, battling poor public opinion polls, was eager to make the pitch for why the Tesla CEO could need to think about South Korea, citing the nation’s high-quality engineers and auto elements makers, and steady provide of electrical energy. Analysts additionally had been upbeat.

“It’s potential, as a result of Tesla is already utilizing a number of elements made by Korean firms,” Koh Tae-bong, a Seoul-based analyst at HI Funding & Securities, mentioned.

“There isn’t a nation like South Korea that has an virtually full provide chain for EVs. We’ve a big chipmaker in Samsung Electronics, three battery-cell makers, cathode and anode supplies makers, digital camera module makers and different smaller key element makers.”

Koh isn’t incorrect. Common Motors has its largest technical middle outdoors the U.S. in South Korea and speaks extremely of its engineers there.

The nation has confirmed resilient all through COVID, skirting large-scale lockdowns which were frequent in China.

Musk most likely would additionally like South Korea’s International Funding Promotion Act, which supplies money incentives and tax advantages.

The South Korean public loves Tesla, too, as I witnessed throughout a visit to Jeju island in Could to attend the Worldwide Electrical Car Expo.

Retail buyers have  purchased into Tesla inventory in an enormous approach, with people in South Korea holding round $9 billion of shares, in response to knowledge from the Korea Securities Depository.

South Korea additionally matches proper into Musk’s “ hardcore” working tradition. It’s one of many hardest-working nations, logging extra hours than the U.S. and another Asian nation within the OECD.

Simply 4.4 p.c of some 21 million individuals within the nation are working from house, up from solely 2 p.c in 2020, the primary 12 months of the pandemic.

Flipside

On the flipside, there are causes Musk may battle in South Korea. There may be the apparent geopolitical danger stemming from North Korea’s nuclear actions.

Sturdy labor legal guidelines can also manifest in frequent strikes by extremely unionized workforces. There may be one occurring now, because it occurs, by the truckers union that has clogged up ports and industrial complexes and hampered provide of key exports.

Musk’s opposition to unions is well-documented. He’s a vocal critic of the United Auto Employees, and the Nationwide Relations Labor Board dominated final 12 months that Tesla had repeatedly violated U.S. labor regulation.

“South Korea is named having a few of the strongest labor unions on the earth,” mentioned Choi Woongchul, a professor at Kookmin College in Seoul. “I’d put the prospect of a brand new Tesla gigafactory in Korea at zero.”

Musk may need to learn up on Kaher Kazem, the previous head of GM in South Korea, who now faces a possible jail time period on costs of illegally hiring contract employees. Prosecutors are looking for a 1.5-year jail sentence for Kazem, who at one stage was banned from leaving the nation.

HI Funding’s Koh had a considered how a Tesla plant in South Korea may work: “Make it 100% automated.” Musk had higher get busy on his humanoid robots.