Tesla CEO Elon Musk Announces 5,000-Unit Sales Target In China For 2016

1 year ago by Eric Loveday 21

Tesla Model S In China

Tesla Model S In China

Tesla Model S Visits The Great Wall

Tesla Model S Visits The Great Wall

Tesla CEO Elon Musk admitted that China as not been a successful place for selling electric cars for the California automaker.

Quoting Musk:

“We are still doing reasonably well in mainland China, but we do face quite [a] high import duty, and we do not yet have access to local incentives,The obstacle for our cars in mainland China is much greater than it would be, actually, anywhere in the world.”

Last year, Tesla missed its 10,000-unit sales target in China by a massive margin. Final numbers aren’t in yet, but in the first three quarters of 2015, Tesla sold only 3,025 Model S sedans in China.

After failing to meet the 2015 sales target, Musk decided to scale back the goal for 2016. Tesla reportedly hopes to sell at least 5,000 electric cars in China in 2016, which is half the mark Tesla shot for in 2015.

Meanwhile, China’s own BYD sets electric car sales records month after month. In 2015, BYD sold over 60,000 plug-in electric cars in China, or at least ten times the amount Tesla sold.

Even more impressive, BYD claims that it could’ve sold more electric cars if it had higher production capabilities. BYD chairman Wang Chuan-fu stated:

“Although the company’s new energy vehicles production is running at full capacity, it still cannot meet the enormous demand of the new energy vehicle market.”

So, while BYD is flourishing, Tesla is struggling to crack the Chinese market. To counter this, Tesla apparently hopes to find a local Chinese partner (this would eliminate import duties and qualify Tesla for more incentives) and establish a production facility in China by as early as mid-2016.

Source: Nikkei

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21 responses to "Tesla CEO Elon Musk Announces 5,000-Unit Sales Target In China For 2016"

  1. Frank says:

    Saab got order for 250 000 + 20 000 EVs this month.

    1. George says:

      Ready about their first (from 1970) and new EV!
      http://saabblog.net/2016/01/25/48380/

  2. Robb Stark says:

    The original Tesla sales goal for China was 5k-10k units.

    According to EV-sales blogspot Tesla delivered 4,775 Model S in China last year.Making it the top selling BEV or PHEV import.

    And BYD mostly sells PHEV not BEV.

    http://ev-sales.blogspot.com/search/label/China

  3. Robb Stark says:

    BTW

    Over 60% of the BEVs sold in Hong Kong in 2015 were Tesla.

  4. Alaa says:

    Keep in mind that BYD does not sell cars in the US.

    1. KUD says:

      Yet, I hope we slap import duties on them when they come.

      1. Alaa says:

        Go to Walmart and look. How many products are made in China?

  5. Pushmi-Pullyu says:

    It’s good that Tesla is finally facing the reality that foreign cars just are not gonna sell as well in China as domestic-make cars. There are too many barriers in place; not only tariffs, but red tape and severe restrictions on the number of license plates available. Plug-in EVs also face a strong market barrier in that the overwhelming majority of Chinese live in apartment buildings with no reserved parking, plus strong red tape barriers to getting parking lot owners to install an EV charge point reserved for their use.

    Tesla has no magic wand to wave and make these barriers to sales go away. If Tesla is serious about selling cars in large numbers in China, it will have to partner with a domestic Chinese manufacturer to assemble cars there. It’s no secret that China has a policy of forcing foreign companies to partner with domestic Chinese companies, to gain full access to the Chinese market; nor is it any secret that as part of such a deal, foreign companies must give up their trade secrets to the Chinese.

    We can hope that China will eventually become more open to imports, as their society continues to modernize; we can hope that they will eventually get rid of the multiple intentional barriers to exports, as well as ending their habit of using any and every means possible to steal or extort trade secrets from foreign companies. But the resistance to imports is heavily entrenched in Chinese culture; it dates to the Imperial era, when the Chinese ban on imports lead to the Opium Wars.

    “The more things change, the more they stay the same.” — Jean-Baptiste Alphonse Karr

    1. ModernMarvelFan says:

      “severe restrictions on the number of license plates available”

      that applies equally to domestic and foreign imports… Tesla being electric actually gets priority in registration or award of license plates.

      1. Pushmi-Pullyu says:

        As I understand it, a limited number of license plates are issued in China, using a lottery system. Some few cities do have a separate additional lottery only for alternative energy vehicles, but far from all Chinese cities do.

        But my point here is that no matter how much media buzz Tesla creates in China, no matter how much advertising Tesla does, and no matter what incentives they offer, they can’t increase the number of license plates available. So Tesla’s team in China making a big “push” for sales… is pushing up against a brick wall. It’s not like automobile sales in first-world countries, which are limited only by how many the auto maker can make and sell.

        1. mr. M says:

          The lottery limit is only a global number. If all cars sold would be teslas all cars in the lottery would be teslas. Meaning more teslas sold regardless who wins the lottery.

    2. ffbj says:

      The engineering of the Chinese markets to heavily favor inferior domestic products is unlikely to change.
      With economic conditions in China continuing to deteriorate I would likely expect higher taxes, fees, etc… and greater restrictions and difficulties for companies doing business in China.
      Also companies already doing business in China and money market speculators, like George Soros, who they have warned against betting on the fall of the Reminbi.
      A good bet by the way.

    3. A guy from china says:

      Quite the contrary. Chineses adore import product and don’t trust domestic manufacture at all. My friend, a Chinese local, bought a tesla in China right after president xi’s visit to the US. Why, because as a political favor, Xi promised to Obama to let tesla to participate the easier lottery for the license plate for “new energy cars” that was exclusive to domestic manufacture before. Why my friend didn’t settle on a byd before? Nobody trust them in China. The point is, trump is right, China screwed us big time and it is time to get tough.

      1. SJC says:

        Tariffs just bring on tariff wars. The idea is to eliminate tariffs not add more of them.

  6. bigsaleucsd says:

    keep in mind that HongKong is a small city, no range anxiety issue, still owners complaint about charging.

    In China, range anxiety + charge difficulty makes Tesla less attractive. And the charge protocol comparability, import tax, etc.

    I do expect model X sells better than model S

    1. Pushmi-Pullyu says:

      Hong Kong is actually a separate market for cars. Hong Kong, a former British possession, uses right-hand drive; the rest of China uses left-hand. Also, travel by car between the two is restricted, requiring a special license.

      http://www.gov.hk/en/residents/transport/crossboundary/xb_driving.htm

  7. Alex says:

    In China the electric revolution will be without big carmakers, Panda EV or other little cheap EV will do the race like in the scooter market where you pay 500 Dollar for lithium scooters, that will be a market for million EVs.

    1. Pushmi-Pullyu says:

      There might well already be millions of EVs in China, if you count all of them — including e-bikes.

      In the USA and Canada, if not other first-world countries, there is a sharp distinction between highway-capable cars and NEVs — low-speed Neighborhood Electric Vehicles, which are limited to a top speed of 25-35 MPH, depending on the State.

      But in China, there is a wider variety of EVs. Some are very low speed like what we Westerners call NEVs; some are moderate speed, some can make a low highway speed, and some can travel as fast as a typical first-world car.

      When it comes to counting EVs as InsideEVs does, counting only street legal, highway-capable plug-in passenger vehicle EVs, it’s pretty easy in the USA and Canada. In China, the category is a lot fuzzier. Sure, EV sales in China are going great guns. But a lot of those cars, probably not the majority but a significant minority, are not fully highway capable.

  8. jmac says:

    The Chinese got started in electric transportation with the electric bicycle thing way back in 1998. They only sold 58,000 that first year but now there are nearly 200 million e-bikes on the road world wide, mostly in China, but also in India and Europe, and gaining in U.S.

    Lately, the Chinese have also been building small, sub- compact neighborhood EVs by the tens of thousands along with normal, full sized EVs.

    https://www.youtube.com/watch?v=P2PS2_R2-FA

    And China is even selling these micro cars in South America…..

    https://www.youtube.com/watch?v=5mvGLs0iAtw

    Looks like China may be mobilizing for the electric car future faster and more forcefully than Europe/North America.

    At least in China, electric vehicles (even if they are only e-bikes, e-scooters and NEVs) are making their way into millions and millions of eager Chinese hands, while Europe and the U.S. struggle to sell just a few thousand EVs every month, many of them high end luxury vehicles suitable for only a relative few.

    Where is the Henry Ford of electric cars ?

    1. Pushmi-Pullyu says:

      jmac said:

      [quote]And China is even selling these micro cars in South America…

      https://www.youtube.com/watch?v=5mvGLs0iAtw
      [end quote]

      Ah, thanks! I had predicted that Chinese make EVs would start selling in third-world countries before first-world countries, given the much more stringent safety/crash tests required to make them street legal in first world countries.

      I’ve read that some of the cheaper Chinese EVs are using lead-acid batteries. From the video, it looks like this microcar is one of them. In Latin American countries they like to run their cars until they fall apart; I doubt they’ll like cars which need to have the batteries replaced as often as these will.

  9. mr. M says:

    The best thing would be to compare Tesla S sales to Audi A6 or BMW 5 sales in china. All have to pay similar import taxes. That would show us how high the chances are for increased sales in the future.