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Tesla Model S Design Studio In China - Company Owned & Operated
Clueless in China?
Tesla's struggles continue in China and we think we know the reason why. Without a joint venture with a Chinese automaker, Tesla will likely see its struggles in China carry on indefinitely. It's how the automotive sector in China operates. Honestly, we can't think of a single other automaker that sells in China that doesn't have a joint venture with a Chinese automaker. For some reason, operating alone in China as an outsider simply doesn't work.
Evidence of that is in Tesla's stumbling Model S sales in China. Here's how Bloomberg reports on the situation:
"Registrations of Tesla Motors Inc. Model S sedans in China fell 45 percent in February from the previous month, according to JL Warren Capital, in a sign that the carmaker’s sales in the world’s largest auto market remain weak."
"The monthly total was 260, down from 469 in January, according to data released Thursday by JL Warren. The research firm also said Tesla imported 63 of the all-electric luxury cars to China in February after bringing in just 10 in January, down from hundreds monthly during last year’s fourth quarter."
Junheng Li, head of research at JL Warren Capital, stated:
“We consider units shipped one of the measures of monthly incremental demand strength in the Model S. The data suggests sharp weakening in the demand.”
Even Elon Musk has shown frustration with Tesla sales in China, so it's not as though this problem isn't recognized by Tesla. There's been several executive shake-ups for Tesla in China and even attempts at rebooting sales there by offering freebies such as a Universal Mobile Connector. It seems as though nothing is working right now, which is why we suggest that Tesla hunts down a joint venture partner. It's a necessary step, in our opinion.
Bloomberg reached out to Tesla for comment on the data from JL Warren. The news outlet received no response from the automaker.
Lastly, there's this issue with unregistered Tesla in China. JL Warren claims that some 1,600 Teslas are sitting in China unregistered. The research firm speculates:
“Maybe they were purchased by scalpers who are hoping to flip it. Demand isn’t as robust as Tesla had anticipated.”
Update: According to Chinese news agency Xinhua, March sales reported 120-150% in March from February, which would indicate a sales level of about 600 odd units sold during the month.