Tesla May Form Joint Ventures With China’s Lifan And/Or Chang’an Automobile Groups
We admit, we do enjoy it when one of our suggestions to an automaker later becomes a possibility.
Awhile back, we suggested that, in order to succeed in China, Tesla Motors would have to enter into a joint venture partnership with a Chinese automaker.
Well, there are now reports from April suggesting that Tesla is indeed looking into forming a Chinese joint venture.
From Want China Times, we discover this:
US electric car marker Tesla Motors may partner with auto manufacturers in Chongqing to build factories, after reportedly sizing up Chongqing-based auto manufacturer Lifan Group and Automobile Group on March 16, reports Shanghai’s National Business Daily.
The reason for the joint venture is to drive down Model S prices in China. As an import, the Model S is slapped with some hefty fees:
“Tesla has two models available in China, the Model S85 priced at 734,000 yuan (US$118,700) and the Model SP85 (Performance) priced at 852,500 yuan (US$138,000). The company sold a fewer-than-projected 2,500 electric cars in China last year given the big price difference between China and overseas markets.”
As we stated in the previous article, a joint venture is almost necessary to do automotive business in China. Even BMW is aware of this:
“BMW has worked with Shenyang-based Brilliance Auto Group for years and the price of their China-made cars is no longer affected by tariffs. Therefore a joint venture factory becomes the first-priority option for Tesla to turn profitable, a market analyst said.”
There’s this issue too:
Besides this, Tesla’s battery charger is not in line with China’s national standard, disqualifying it from the policy on the exemption of vehicle purchase taxes for new energy vehicles published last August. It would save 70,000-80,000 yuan (US$11,300-$13,000) on each car according to its selling price if it was on the list, an analyst said.
So, all sorts of problems for Tesla in China, but the solution is rather simple actually: form a joint venture with a Chinese automaker.
Want China Times says this of Lifan and Chang’an:
Lifan Group has been known for developing new -energy vehicles over the past few years and its self-designed chassis-replacement technology was granted a national patent last April. Chang’an Automobile Group meanwhile announced its new-energy vehicle strategies earlier this year.
Hey Tesla, form a joint venture with a Chinese automaker. You can thank me later.
Source: Want China Times