Erdogan Aims to Use Starlink as a Bargaining Chip for a Tesla Factory in Turkey

Turkish President Recep Tayyip Erdogan recently extended an intriguing invitation to Elon Musk, suggesting that Tesla, Musk's electric vehicle company, should open a factory in Turkey.

by Faruk Imamovic
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Erdogan Aims to Use Starlink as a Bargaining Chip for a Tesla Factory in Turkey
© Getty Images Entertainment/Riccardo Savi

Turkish President Recep Tayyip Erdogan recently extended an intriguing invitation to Elon Musk, suggesting that Tesla, Musk's electric vehicle company, should open a factory in Turkey. This invitation was extended on the sidelines of the United Nations General Assembly in New York.

The twist? Erdogan's offer came in response to Musk's own interest in expanding his Starlink satellite service into Turkey. While Tesla executives were notably absent from the gathering, Musk was not alone. Accompanying him were SpaceX associates, including Ryan Goodnight, the SpaceX CEO responsible for opening new markets, and Omar Kunbargi, the SpaceX Sales Manager.

Also present was Lauren Dreyer, responsible for business activities related to Starlink, the internet service operated by SpaceX.

Starlink's Market Dilemma

Starlink has been striving to extend its reach globally but faces hurdles in certain markets—Turkey being a prime example.

The satellite service has been bleeding money as its constellation orbits over countries where it can't operate due to regulatory barriers. According to Quartz, the American business portal, Turkey is a "dark spot" for Starlink.

As the world's 19th largest economy with a population of 85 million, Turkey represents a sizable untapped market for the satellite internet service. The Turkish government's official statement highlighted that Erdogan's invitation to Tesla came as a counteroffer to Musk's desire to expand Starlink's operations into Turkey.

This places Musk in a delicate position of having to negotiate not only for Starlink but also for Tesla, two of his key business ventures.

Navigating Complex Geopolitics and Business Interests

SpaceX, Starlink's parent company, has a somewhat complicated history with Turkey.

Despite the fact that SpaceX launched multiple satellites for TurkSat in recent years, the company faced protests from the Armenian community in 2020. Armenians allege that Azerbaijani forces used these satellites against them in the Nagorno-Karabakh conflict three years ago.

This led ViaSat, a competing satellite operator, to halt its business activities with Turkey. Moreover, Turkish telecommunications are state-controlled, requiring foreign satellite companies to partner with TurkSat. This adds another layer of complexity for Musk as he must weigh the business interests of Tesla against those of SpaceX.

Similar challenges have arisen for Musk in China, where Tesla operates a factory in Shanghai. However, Starlink has yet to penetrate the Chinese telecommunications market. The Erdogan-Musk dialogue raises several questions about the interplay between geopolitics and commerce.

Both Turkey and SpaceX stand to gain significantly from a potential partnership, but at what cost? Musk's dilemma exemplifies the intricate balancing act that business leaders often must perform in the global arena, especially when technology, politics, and financial stakes converge.

Tesla Recep Tayyip Erdogan Elon Musk
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