Tesla Model S In China

Tesla Model S In China

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 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