Analyst Says “Nobody Can Compete” With Tesla In China




Tesla Model S in China

Following a recent visit to Beijing, Piper Jaffray analyst realizes that Tesla should have no viable competition in China.

Piper Jaffray’s Alexander Potter wrote a note to clients about Tesla’s prospects in China. China is a huge market for EVs since it’s the world’s largest automotive market and now considering banning gasoline and diesel vehicles in the near future.


Model X debut in Beijing

Tesla’s reputation in China is substantial and the automaker’s popularity is quickly accelerating. During Potter’s visit to Beijing, he met with an EV trade group.

Following the visit, his firm gave the automaker’s stock a price target of $386 per share and a buy rating. Jaffray wrote (via Teslarati):

“After meeting with an electric vehicle (EV) trade group this week in Beijing, we still think Tesla has little to fear from Chinese brands, at least based on the current competitive landscape.”

Goldman Sachs also raised its Tesla price target. The firm tends to be more bearish regarding the Silicon Valley carmaker, but it bumped its price from $180 to $190 per share after CNBC reported:

“Branding and performance are just as important, and in this regard, we think nobody (least of all Chinese OEMs) can compete with TSLA.”

Many manufacturers in China are bringing electric cars to market. However, there is nothing in the country that is to the level of the Tesla Model S or X. Once the Model 3 makes it way around the globe, the automaker’s dominance in China should become even more prevalent. Potter’s note continued:

“Anyone who has taken a ride in a Chinese EV will tell you that, like most other Chinese sedans, these vehicles just aren’t compelling consumer products.”

Tesla is also working hard to adapt its vehicles to fit China’s standards. This week, the automaker announced that Model S and X vehicles are being built specifically for the Chinese market and have a charging port that complies with the country’s national charging standards.

Additionally, Shanghai is now home to the world’s largest Supercharger station, as Tesla moves to have 1,000 Superchargers installed in the country by the end of 2017.

Source: Teslarati

Categories: Tesla

Tags: ,

Leave a Reply

22 Comments on "Analyst Says “Nobody Can Compete” With Tesla In China"

newest oldest most voted

I don’tknow what this guy is smoking but it must be strong stuff. Tesla is subject to a 25% import tariff and because it doesn’t use chinese batteries it does not get the advantage of chinese subsidies. In other words Tesla is way more expensive than chinese brands and thus at a significant disadvantage.

There is reading and there is comprehension. In some cases like East and West, the twain shall never meet.

Many rich people in China don’t want a Tesla because it’s not expensive enough.

You can overcome a 25% tariff at the extreme high end, where it’s about status and the higher price merely makes the brand more exclusive. Mainstream, even high end mainstream, is a different story.

The extreme high end of the Chinese market is big enough for a small mark like Tesla to sell meaningful volume. But that’s a FAR cry from saying “nobody can compete”. Especially when outfits like BYD outsell Tesla 100:1 in China.

If you have a 4% marketshare, nobody is outselling you by 100:1.
To outsell Tesla 10:1 you need a 40% marketshare.

What is the marketshare of BYD?

He’s actually doing a Peter Lynch product comparison.
He’s telling you specifically no Chinese Manufacturer right now successfully compete’s with Tesla.

The article has a misleading headline. The actual quote claims nobody can compete with Tesla in regards to branding and performance.

Chinese companies will battle amongst each other to grab the low end of the market, but I agree that Tesla has no threat in their price range. It feels similar to how the iPhone is wildly popular in China despite numerous high quality alternatives from Chinese manufacturers.

Apples & Oranges [poor pun intended].
Iphone-v-Tesla price comparison- ridiculous.

Nothing further.

The low end is where the market is, in general but particularly in China. Sure some top level party officials or top level company officers can afford an expensive Tesla but that’s a handful of sales at best.

Tesla doesn’t sell into the low end yet.
And BYD, according to this analyst doesn’t sell or compete with Tesla in the high end.

But, of course BYD can improve their products over time.
But, it took the Japanese a long time to reach and exceed American quality.

So, not that things won’t change, but, this seems like correct analysis.

And BYD should really be planning to replace the whole fleet of ICE buses in China. That’s where a lot of money is at and a quicker fix for air pollution. With essentially no competition.

In other news, drunk analyst spotted. BYD and others are eclipsing Tesla

Look, another new username troll. I wonder which existing hater this is?

Trolling? Don’t think so. Hater? Possibly.
Your comment reminds me of the apocryphal remark attributed to Reagan- “Facts are stupid things”.

There are 30 Million people who are millioneres. They want status symbols. See the Louis Vitton shop there. Selling >$1000 bags like hot cakes..Tesla is just another must have item for new rich.

Another “Captain Obvious” observation!

China and EV growth, is by far the most robust growing market that exists anywhere, at least in the next few decades. This will be the profit center of EV mobility and for Tesla. Hope Elon can make some real substantial inroads to the Asian EV market.

At the moment there are 168 Supercharger stations in China.

The Tesla Supercharger Network in China is a substantial factor already. And the number of Supercharger Stations is increasing every year.

This will lead to higher Tesla EV sales numbers in China.

China wants to help Tesla succeed in China. Millions of Communist Party members are potential sales, along with many well off Chinese, who have the impression, and a correct one, that foreign autos are better made.

The desperate plight that pollution has put China in due to years of neglect is being remedied, or at least the attempt to do so is being made. China is putting the hammer down on polluters and Tesla’s Elon Musk is the Golden Boy. You can’t think of it terms of normal types of governments, which is the West are often bogged down by counter forces, while in China, if the government decides on a course of action they will whip those into place, that are not toeing the line. If you argue, you have no legal recourse, it’s all about influence peddling and bribery to get things done, though they are trying to crack-down on that too.

So far I give them a C+. Backing down to the car companies this year lowered them a grade.

Tesla selling in vast numbers in China would make ‘production hell’ look like a minor blip.
Historically China & other Asian nations have demanded low price over the expense of quality; Tesla will sell well to the 1% but even the M3 won’t appeal to the masses there, to any significant degree. Even less so in future India…

I suppose this makes me a ‘Hater?’ Oh please!

“Analyst Says ‘Nobody Can Compete’ With Tesla In China”

Ridiculous Tesla stock pumper fluff.

BYD is outselling Tesla in China by a wide margin, both in terms of income and in terms of sales numbers. It’s almost inconceivable that will ever change. If Tesla ever shows signs of getting an upper hand, the Chinese central government will simply change the rules yet again, to favor domestic Chinese industries even more lopsidedly than they already do.

Now, if the headline said “Analyst Says ‘Nobody Can Compete’ With BYD In China”, that would be far closer to the truth.

People quoting past numbers, or 2017 YTD numbers are missing the point. This is about forward looking numbers.

You must be thinking 2057??