Tesla Ups Its Game In Hong Kong

3 years ago by Eric Loveday 21

Tesla Model S Debuts In Hong Kong In July (along with a couple of Supercharging Stations)

Tesla Model S Debuts In Hong Kong In July (along with a couple of Supercharging Stations)

Model S In Hong Kong

Model S In Hong Kong

In a press release, Tesla Motors announced the following will take place soon in Hong Kong:

  • Employ additional 50 workers
  • Move to new 10,000 square-foot office
  • Assign country director for Hong Kong

All 3 actions are in anticipation of high demand for the Tesla Model S in Hong Kong, which just recently launched there.

Tesla adds:

“…registration tax exemption in Hong Kong means that Tesla can offer its products at relatively competitive prices. The Hong Kong government seems to be highly receptive on the wide-scale use of electric vehicles…”

Here’s the pricing breakdown for the Model S in Hong Kong:

  • 60 kWh Tesla Model S: HK $579,000 or $74,650 USD
  • 85 kWh Tesla Model S: HK $657,000 or $84,706 USD
  • P85 Tesla Model S: HK $761,800 or $ 98,218 USD

A fully loaded P85 Tesla Model S will cost Hong Kong buyers HK $1,038,300 or $133,866 USD

The cheaper prices in Hong Kong (as compared to China) are due to shipping costs, high duties and taxes that are present in China, but which don’t exist to the same extent in Hong Kong.

Tesla claims to have hundreds of pre-orders for the Model S in Hong Kong. Deliveries are now underway.

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21 responses to "Tesla Ups Its Game In Hong Kong"

  1. Mark B. Spiegel says:

    I read this story several weeks ago but don’t recall a “press release,” nor does it show on Tesla’s site: http://www.teslamotors.com/about/press/releases

    Do you have a link?

    Regardless, the Hong Kong market is tiny and even tinier for $100,000 sedans. The Mercedes S-Class is the #5 selling car there overall and is only on track for around 2000 for the entire year.

    1. Jouni Valkonen says:

      I guess that Tesla can sell in Hong Kong about three times as many cars as Mercedes’ luxury cars, so we can expect for 2016 sales about 6000 S/X (about 1.5 % market share) and for 2018 onwards about 18 000 cars with S/3/X lineup.

      It is very likely that Hong Kong will impose strict pollution requirements for new cars as soon as in few years and by 2017 only Tesla and Nissan Infiniti have announced plans for electric cars. Here I do not count non-AWD short ranged golfcarts as electric cars, because people do not want those even in Hong Kong.

      Therefore Tesla and Infiniti has practically a duopoly for Hong Kong car markets in premium car segment as far as we can predict.

      However, I expect that all electric BMW i5 is announced soon and also I expect from VW to get electric Passat on markets in not too distant future, when they realize that people do not want to buy their plug-in hybrids, because all gasoline cars are more convenient. So it is probable that others will too get serious. Anyway, with Gigafactory, Tesla is only one who has prepared to get Serious on electric cars!

  2. Rob Stark says:

    Although part of China since 1997, Hong Kong car sales are reported by the HKMTA and not included in overall China data. The market is up a cool 24% year-on-year in July to 4,622 registrations, bringing the year-to-date total to 29,776 units, up 11% on 2013. Toyota continues to dominate the brands ranking with 22% share this month, ahead of Mercedes (11.7%), Volkswagen (9.1%) and BMW (8.1%). In the models ranking, if the Toyota Hiace reclaims the top spot it holds year-to-date, the rest of the charts see lots of change: the VW Golf is up 5 spots on June to #2 with 4% share, the Toyota Noah is down two to #3, the Toyota Crown LPG Taxi is up 5 to #4 and now #2 year-to-date and the Mercedes CLA reaches its best ranking anywhere in the world at an astounding 7th place thanks to 99 sales and 2.3% share! Notice also the Mercedes E-Class at #6, S-Class at #9, ML-Class at #15, Audi Q5 at #16 and the BMW X5 at #17.

    http://bestsellingcarsblog.com/category/hong-kong-china/

    Hong Kong is an island nation of a wealthy 7M people. Higher GDP per capita than the USA.

    It is the perfect market for Tesla. If S Class does 2k sales there Tesla can easily do that. That would be 5.7% of Tesla’s target production this year.

    1. Mark B. Spiegel says:

      “If S Class does 2k sales there Tesla can easily do that.”

      Why can Tesla “easily do that”? The S-Class is outselling the Model S this year by at least 2:1 in pretty much every market (except heavily subsidized Norway and California) in which they compete head-to-head… And most Hong Kong residents live in apartment buildings without charging capability.

      1. James says:

        I don’t think anyone expects Tesla to outsell any Mercedes, BMW nor Audi in Germany, Austria or any number of European countries in the next few years. Nationalism runs strong there, no matter that a Tesla sedan offers abilities that none of their models come close to.

        It is, however, extremely important for Tesla to enter those markets and “pick off” those independent thinkers who’re willing to try new things. In the past, people flocked like sheep to buy cars by marques their fathers and grandfathers bought. Today is changing fast. The information age has given rise to more educated consumers, and more open-minded consumers. Every single Tesla sold could be a nail in Mercedes’ coffin if these legacy manufacturers don’t evolve to build models that can do what a Tesla does. Word gets out – and slowly, people will be converted.

        Same in Asia. Admittedly, in Asia there is far less allegiance to a German brand than to a product that is superior in many ways. I think Hong Kong is an excellent place to compete with brands like Audi and Mercedes on terms based more on capability than on legacy or nationalism. I believe you will be surprised as to Tesla’s success in these new markets.

      2. Rob Stark says:

        9/10 Apartment managers in China are accommodating Tesla according to various reports and I see no reason why HK would be different. Seeing the orders coming in further confirms this.

        Yes, every 10 years when S-Class has all new model it outsells Audi A8,BMW 7 Series,and Jaguar XJ combined. Then it settles down.

        In the USA when Tesla had ample supply in 2013 it outsold S-Class. For various strategic reason Tesla chose international expansion before saturating the domestic market.

        In a small island Tesla’s benefits are prominent and its detriments are negated. Therefore I expect 2k annual sales there easily given that allotment.

        1. Mark B. Spiegel says:

          “Seeing the orders coming in further confirms this.”

          I’m sorry, but which orders are you “seeing come in,” seeing as Tesla refuses to report them (or monthly sales or backlog)?

          And in 2013 Mercedes had no S-Class for a while, as it was between models until the middle of the year. Thus, it’s now a “fair fight.”

          I also see that you appear to be buying into the “capacity constrained” story, which has been absolute nonsense for a while now. Musk himself said in the last conference call that they have plenty of batteries, and the plant could easily run three shifts if it had the demand, but it doesn’t. The production rate is reportedly still the same 800 cars a week it was before the factory shutdown, and U.S. delivery times are still the same two months despite the addition of all the new markets.

          No, this company now has a very big DEMAND problem, which will be evident when it drastically takes down Q4 guidance.

          1. Jason says:

            What a surprise:

            Mark B. Spiegel
            Hedge Fund Manager – Stanphyl Capital Management
            “Disclosure: The author is short TSLA.”

            & constantly writes anti-Tesla articles at Seeking Alpha where they don’t screen their authors

            http://seekingalpha.com/author/logical-thought/articles

            So just how much bias would you assume if you were reading someone else’s comments with a bio that reads like that, but was long Tesla, Mr. Hedge Fund Manager?

            1. Mark B. Spiegel says:

              Yes, I’m short the stock and clearly make no attempt to hide that as I post here under my real name. I have nothing against EVs for localized travel– I just think TSLA @ $30 billion is the biggest bubble stock since 1999 and get irritated when people repeat the company’s PR nonsense when a bit of digging reveals that a lot of it isn’t true.

              I also notice that you didn’t respond to the specific points in my post, but that’s par for the course among Teslarians. If you own a PEV good for you, but if you own TSLA you’d better open up a spreadsheet and come to a mathematical opinion as to exactly what it’s worth. My plan is to cover my short position at around $60 at some point over the next 24 months, but I may lower that target if Musk keeps burning cash like a drunken sailor.

              1. Jouni Valkonen says:

                I too appreciate your honesty and the fact that you have betted real money to support your arguments!

                Also your negative comments, although they are annoying, are at least provoking discussion. But they are mostly harmles, because long term stock value is not based on what people think but what is the most likely outcome. However, I think that it hurts your self-esteem as you are constantly proven to be wrong with your short term predictions.

                But anyway. Could you specify: how probable you think that Tesla will miss its 2014 guidance? That is, can Tesla exceed Q4 target?

                And second question. Your long term argument has been that Tesla is already demand limited rather than supply limited. Therefore, when do you think that Tesla will stop growing at planned 40 % growth rate and you can just test drive your car and get your Tesla car instantly delivered after purchase.

                And last personal question. If it happens that you win big money with your short bet on $TSLA, will you buy with that money new Tesla Model 3D with 500–600 km range?

                1. Jason says:

                  Mark,

                  “Yes, I’m short the stock and clearly make no attempt to hide that as I post here under my real name.”

                  Yes you did as you are legally bound to do in your position. You also made no attempt to disclose your position either so unless someone goes and researches your name and reports back no one is the wiser. You are a smart guy, so you understand how to cover your butt just enough while admitting nothing.

                  I could care less if Tesla makes a billion dollars or loses a billion dollars, I just want them to keep selling as many electric cars as they can until nobody wants gas cars anymore.

                  What you are probably irritated with is how Tesla kept rising while you were betting against it. Well the market is freefalling now, so this is your chance to get out. The only problem is you have been short it by some amount since at least last summer if your Seeking Alpha articles are any indication, meaning your ego, or your desire to not realize a lose on paper, probably will not let you leave it alone until you at least breakeven. You probably need $60 to square up.

                  1. Mark B. Spiegel says:

                    I’m not “legally bound” to disclose anything here. It’s obvious that I’m short as anyone can Google my name and see my articles– if I had the slightest interest in hiding that I’d do what you do, and not post under my full (or real) name. The reason I didn’t explicitly mention the short position in my original post is that this started out being about “the company” rather than the stock price.

                2. Mark B. Spiegel says:

                  @Jouni

                  I think it’s 99% probable that Musk misses Q4 guidance (and thus the full year) by a lot, and accompanies it with the excuse that a lot of people cancelled their orders to get AWD versions instead (even though he didn’t have enough orders before he announced the AWD). I then think Q1 2015 can be okay as the cancelled orders get delivered but that Q2 will be awful as the Model X won’t go into serious production until Q3 at best and maybe not until Q4. And then in 2016 GM will have the 200-mile PEV and Nissan will have the 150-mile leaf and every high-end carmaker will have multiple plug-in hybrids that most people will find more practical than a Tesla as they will let them drive around town (for 20-30 miles) in full electric mode and yet have 500-mile range and five-minute refill times for longer road trips. While no one of those hybrid cars will outsell a Tesla, collectively they will hurt Tesla sales very badly. Even the new plug-in Cayenne (available next month) and plug-in Volvo SUV (available in the spring) will steal some sales from the Model X before the X is even available.

                  My blended basis on this short position is $201 and, as I said, I expect to eventually cover it in the $60s or below (at which point TSLA would still have an absurd $9 billion market cap).

                  1. Jouni Valkonen says:

                    @Mark

                    haha, I will take that 1 % and say that Tesla will exceed the Q4 Guidance! We will see that then in late winter when Q4 results are announced. I will remind you when we see the actual deliveries.

                    Plug-in hybrids are Rube Goldberg machines. Only very small minority is willing to pay extra for hybrids to increase fuel efficiency and even this is because of government incentives that are discontinued if the market share of hybrids enlarges.

                    Hybrids are great as e.g. McLaren P1, but that’s about it. Actually, it is probably cheaper to reduce carbon emissions if instead of expensive hybrid, it is used e.g. 50 % synthetic Diesel and 50 % fossil Diesel.

                    Therefore plug-in hybrids are no-go.

                    But in real life Tesla does not compete with hybrids or small GM electric cars, but it is competing with Audi Quattro and BMW xDrive cars. These are Real cars that can cruise on autobahns at 250 km/h and they definitely do not have a plug!

            2. Nick says:

              Ahhhh! A fund manager!

              I wondered why Mark seemed to be willfully misleading and over the top with negativity.

              You cracked it!

              1. Mark B. Spiegel says:

                Hi Nick,

                Please point to what I said that was “willfully misleading.” Thanks in advance!

          2. peet365 says:

            It is funny that you quote Musk from last EC as a proof that they are not production constarined, when he said several time during that call that they are production constrained. If they continue to deliver on their promises you better cover yourself now with this fall, because there is very small possibility that TSLA will be 60 anytime soon.

            1. Mark B. Spiegel says:

              Musk lies all the time. For instance, on the last conference call he said they removed “hundreds of pounds from the Model S” (false) and that China has waived the sales tax for Tesla (false as of when he said it– I don’t know if that has subsequently changed). And no, they’re not “production constrained” as evidenced by the two-month U.S. wait times– the exact same wait you’ll get from any other car maker if you custom-order one rather than taking it off the lot.

  3. mhpr262 says:

    TESLA has upped its game … so: Up Yours Too, Mr Spiegel.

    1. Rick Danger says:

      Nice! +1 🙂