Tesla To Enter Chinese Market, Where It Will Inaugurate A Plant
|   Wednesday, April 30, 2014
Tesla has delivered its first automobile on the Chinese market, the country in which the American manufacturer of electric cars will open in the near future a new plant. This way, the Americans will avoid exorbitant customs duties, and come closer to the Chinese audience, thirsty for everything that is premium and high-tech. The Model S, Tesla's flagship, has a price of about 115,000 dollars on the Chinese market.

"At some point in the next three or four years we'll be establishing local manufacturing in China.
China is very important to the future of Tesla. We're going to make a big investment in China in terms of charging infrastructure" said Elon Musk, Tesla CEO.

The sales of electric cars evolve shyly in China, but producers see huge potential for growth in the second largest economy in the world. China is facing some serious problems related to pollution in urban areas, and the government is preparing measures to encourage the purchase of electric cars.

Moving production locally to the largest auto market in the world, would allow Tesla to sell its models at lower prices simply by avoiding the 25 percent import tariff in China. Entry into this country presents an opportunity for Tesla to sell as many vehicles as in the United States, as soon as possible. Meanwhile, Musk will try to do what the Chinese government wants, which is to convince Chinese customers to buy electric cars.

"I think they can sell quite a few here in the market," said Finbarr O'Neill, president of J.D. Power & Associates. "There's a lot of talk about Tesla but, you know, their numbers are not huge. Mr. Musk has been successful in many fields. I wish him luck, but there's a limit to every market."

Equipped with a battery pack of 85 kilowatt-hours, the Model S will be sold from 734,000 yuan (118,000 dollars) in China. In the United States, the same model costs only 71,000 dollars before federal tax credits. The increase is due to shipping charges, value added taxes as well as import duties. To offset that, Tesla said the Chinese electric car subsidies will help to balance the additional costs associated with selling their models in the country.

"China is very important for the future of Tesla's market. We'll make huge investments," said Musk. "Our sales, our services will be customized for the Chinese. The most important message I want to convey (is that) we believe that China is a very, very important country. We will do a lot of investing in China, to ensure that anyone who buys a car has a very good experience."

Besides high prices, another problem of electric cars in China and other parts of the world is the absence of a specific infrastructure - networks of electric power stations. According to Chinese media, Tesla was already prepared to face this issue, Musk committing to launch by 2015 a national network of battery charging service.
In addition to opening future manufacturing facilities in China, Tesla has planned the construction of a battery plant in the United States too, which will have by 2020 a production capacity higher than the value of the global market in 2013. The new plan will have approximately 6,500 employees and mark an investment of up to 5 billion dollars.
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