Tesla Gearing Up For First Model S Sales in China; Musk Says China is a “Wild Card”

JUL 30 2013 BY ERIC LOVEDAY 16

Tesla Model S Getting Ready to Head to China?

Tesla Model S Getting Ready to Head to China?

Tesla Motors has fulfilled almost all of its backlogged Model S orders in the US and is now in the process of getting the electric sedan delivered to eager buyers in Europe.

Tesla First Store in China Will Be Within This Magnificent Structure

Tesla’s First Store in China Will Be Within This Magnificent Structure

But come Fall, Tesla will begin to venture into the unknown: China.

Even Tesla CEO Elon Musk says that China is a “wild card,” meaning that it could  be a successful country in terms of Model S sales or it could be a flop.

It’s believed that Tesla will unveil its grand China plan sometime next month.  That plan will include the opening of an 8,000 square-foot Tesla store in central Beijing at the Parkview Green mall.

San Jose Mercury News interviewed several individuals to determine what might be Tesla’s plan of action for China.  We’ve quoted some of those interviews below.

Mike Omotoso, senior manager of global powertrain forecasting at LMC Automotive:

“China is the biggest auto market in the world, and that’s why Elon Musk is really pushing for sales in China.  The showroom is being built in Beijing’s equivalent of Rodeo Drive. The Model S may be a good way for the Chinese to say ‘I’m wealthy, but also environmentally responsible.”

Charlie Paglee, CEO of Brannan Auto Engineering in Shanghai:

“Tesla will sell successfully in China because it is a very high quality and well engineered automobile, a luxury brand and it is foreign made.  Chinese customers will buy the Tesla to show off their wealth and demonstrate their love of the environment. Tesla will be successful in China because they have already become a status symbol in the USA and that standing will translate to China, similar to the prestige of owning an iPhone.”

Theodore O’Neill of Litchfield Hills Research:

“Huge risk.  I don’t see the China market as having any meaningful impact for Tesla’s numbers over the next 18-24 months. I’m far more concerned that the Chinese will take a Model S, tear it apart and knock it off.”

Christopher Foss, senior manager at Dunne & Company in Hong Kong:

“Hong Kong and China are actually quite different markets. Hong Kong is an extremely wealthy island state with very short commutes, which is ideal for the introduction of electric vehicles like Tesla.  Mainland China is a huge country with massive cities typified by urban sprawl, constant traffic jams, and long commutes. But by 2020, China will account for half of all luxury vehicles sold worldwide. So there is certainly strong growth potential for Tesla in the Middle Kingdom, if conditions to provide enough charging stations for the vehicles can be met.”

You see, there’s a lot of disagreeing over what could become of Tesla in China.  On one hand, Tesla could be a Chinese success story.  On the other hand, Tesla’s move into China could prove disastrous.  It’s risky.  That’s for sure.

Source: San Jose Mercury News

Categories: Tesla

Tags: , ,

Leave a Reply

16 Comments on "Tesla Gearing Up For First Model S Sales in China; Musk Says China is a “Wild Card”"

newest oldest most voted

Is Tesla promising “free” fast charging outside the US? If they are I think it’s a mistake. They should by all means build international fast charging stations only if subsidized by the Country, and charge for usage base on local utility cost.

NPNS!
Volt#671

Doesn’t a Volt cost about $70K in China? You know a Model-S performance will be $150,000 in USD there.

I was thinking the same thing. I don’t know the numbers, but I know that China has oppressively steep import tariffs. The Model S is going to be incredibly expensive to buy.

It looks like it could be a 25% import tax with a 17% value added tax(VAT) and maybe even a consumption tax to be sold in China.

http://www.forbes.com/sites/jackperkowski/2013/03/15/will-the-chinese-buy-a-tesla/

On a positive note, import and VAT are 0% for an EV headed to Hong Kong.

It is already 114000 $ in Brussels so 150000 $ in China would not be over the top.

I think it will be a huge success and could also spur an interesting emulation where Chinese companies start to try to do the same and come up with probably somewhat less performant cars but much more affordable ones.

In the end, this could be an indirect and unexpected way Elon Musk achieves his intended affordable EV 200 miles. Not directly, but by instigating action at Chinese companies to do just that.

The comments about copying the Tesla just because it is sold in China is silly. Obviously, they have probably already done that!!! So have every other car maker in the world (including BMW who bought two to tear apart).

I think it will sell well in China. It’s a big American car for wealthy people, and they like that. Plus, it doesn’t pollute and will be cheap to operate. Win, win.

Honestly, I can see a plant in China making Model X, Y and Z in the coming decades.

+1

I can only see scenarios where Model S becomes the most desirable car in China. Very, very few will be able to afford it, which will limit the volumes. That only sets the stage for Gen III.

” On the other hand, Tesla’s move into China could prove disastrous. It’s risky. That’s for sure.”
—————-

What’s the risk? You open a store, and if they don’t sell, you move on. It’s not like Tesla is investing $1 billion on this. And as stated, China is the #1 car market, so it would be riskier to not sell there.

Since the Chinese are going to eat our lunch, they might as well eat some Teslas. The market is so huge in China I’m sure he can sell everyone he makes there.

A small side effect could well be that the waiting number on a car suddenly get 6 zeros extra. If one billion Chinese order a Model S, you get yours in year 25632 (The first 25 is no error).

I’ll sum up the risk in two words.

Reverse Engineering.

I’d bet that within 18 months of the first shipment, we’ll start to see a new Chinese electric brand called Teesa, and it will look surprisingly familiar.

Yes, because anyone with the intent and the means to copy it certainly will not do so unless the car is sold in China and will wait until their car is delivered…

We have copied:
Belt drive, Chain drive, Chinaware, Compass, Dental amalgam, Escapement, Gimbals, Gunpowder, Ink, Kite, Paper, Printing, Pontoon bridge, Pound lock, Silk, etc …
Dare they copy a Tesla, what a shame!

Christopher Foss does not seem to be aware of the range of the car, the high income of the owners and their access to charging “if conditions to provide enough charging stations”.

He also seem unaware that evs do not idle, and are therefore are uneffected range-wise by traffic jams.

And he overestimates the size of urban sprawl and what constitutes a long commute in an urban environment.

Because the Model S is one of a kind with no competitors, if I were Elon I would stipulate to other countries if they want the Model S it sells with no import tariffs or doesn’t get shipped. You want my product, you play by my rules!

NPNS!
Volt#671

I some how think Tesla might soon be looking at building a large system of superchargers in China if they sell over 10,000 of their cars in one or two years. This is good that Tesla is setting up shop in China in that it will help start up the road to cutting growing global Chinese oil demand from rising numbers of cars.