Turkish President Recep Tayyip Erdoğan has made a request to Elon Musk, asking him to consider building a Tesla factory in Turkey. This request was made during a meeting on the sidelines of the UN General Assembly in New York City. The meeting was attended by Erdoğan and his officials, as well as Musk and his colleagues from SpaceX.
Interestingly, the Tesla executives were not present at the meeting. Instead, Musk was accompanied by Lauren Dreyer, who oversees business operations for Starlink, SpaceX’s satellite internet network. Ryan Goodnight, who is responsible for expanding internet service markets at SpaceX, and Omar Kunbargi, a SpaceX rockets sales representative, also joined the meeting.
According to the official statement released by the Turkish government, Erdoğan’s request for a Tesla factory was in response to Musk’s request for permission to operate Starlink in Turkey. This exchange highlights the complex nature of Musk’s negotiations with foreign governments, as they have the ability to leverage his various companies against each other.
The unique architecture of Starlink, with its thousands of satellites orbiting the Earth instead of remaining stationary above a single region, requires global user adoption for its success. Without market access in certain regions, the costly network becomes unprofitable. Turkey, being the 19th largest economy in the world and home to 85 million people, has been a untapped market for Starlink for years. However, the company has been unable to gain permission to operate in Turkey thus far. The future of SpaceX and Musk’s ambitions to reach Mars depend on the success of Starlink, which has been a $10 billion investment but has not generated as much income as anticipated.
SpaceX has had a longstanding relationship with Turkey, having launched satellites for TurkSat in the past. However, there have been protests and criticism surrounding the use of these satellites to support military actions of Turkey’s ally, Azerbaijan, in a conflict with Armenia. Starlink’s competitor, ViaSat, even stopped doing business with Turkey due to similar concerns. Despite this, in 2022, SpaceX did launch Armenia’s first satellite. It’s important to note that the Turkish government is not focused on expanding internet access for its citizens, as there are restrictions on content and repercussions for online speech. Telecommunications in Turkey are also state-controlled, and the government typically prefers foreign satellite companies to partner with TurkSat. However, Starlink’s network does not provide an obvious role for TurkSat to play.
Nevertheless, Erdoğan’s request shows that high-tech investments that create jobs and enhance international prestige are always desirable. As Tesla is expected to announce the location of its seventh factory in the near future, Musk will have to consider the manufacturing needs of publicly-traded Tesla versus the priorities of privately-held SpaceX in terms of market access.
This dynamic is similar to the one observed in Musk’s relationship with China. Tesla’s manufacturing operations in Shanghai and its EV sales in China influence the behavior of Musk’s other companies. Starlink has stated that it will not seek access to China’s tightly controlled telecom market, and Musk has echoed Chinese talking points regarding control over Taiwan on his social media platform, X. Musk has always capitalized on the synergies between Tesla and his other private companies, such as deploying Tesla engineers to assist with materials science at SpaceX or involving them in codebase development at Twitter. While some investors have raised concerns about these conflicts of interest, courts have dismissed these worries, particularly in a shareholder lawsuit related to Tesla’s acquisition of SolarCity in 2016.
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