By on April 22, 2014

Model S - Tesla Motors China

Though Tesla is now just delivering new vehicles to China, CEO Elon Musk predicts his company will build luxury electric vehicles in the burgeoning market within the next three to four years.

Bloomberg reports the move to localized production would allow the automaker to sell their wares while also avoiding China’s 25 percent import tariff. Right now, a new Model S retails for $118,000 in Beijing due to VAT, shipping and import duties, compared to $71,000 in Los Angeles. Musk hopes to qualify the Model S for local subsidies to help offset costs in much the same way the luxury EV sedan receives federal tax credits back in the United States.

In addition, Tesla is expanding its Supercharger network to China, with Beijing and Shanghai among the first cities to join. No word yet as to how much the automaker is investing in the expansion.

A number of challenges lay ahead for Tesla’s move into the market, including slow adoption of electric vehicles among Chinese consumers and lack of a robust infrastructure, as well the loss of China general manager of operations Kingston Chang prior to the automaker’s entry. That said, Tesla plans to increase overall global sales 56 percent this year, moving 35,000 EVs out of the showroom in so doing.

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24 Comments on “Musk: Tesla Will Build Cars In China Within Next Few Years...”


  • avatar
    Hummer

    What incentive do Chinese have to go with Tesla?
    Almost every automaker selling in China have lineups designed with Chinese tastes in mind. The “cool” factor that sells Teslas here doesn’t exist as ICE haven’t been used in masse in china for as long as they have here. And regressive medieval level taxes used in Europe aren’t as bad in china in addition to more money being availible then in Europe.
    EVs aren’t doing strong in china vs the US for quite a few reasons, bold move to build a plant in a place that doesn’t have a govt incentivizing them in the same way ours does, and also lacking the following it has here.

    • 0 avatar
      jmo

      http://www.bloomberg.com/news/2014-04-02/china-considers-more-electric-car-incentives-vice-premier-says.html

      I would assume Tesla’s decision hinges on China’s future plans to increase electic car use.

      • 0 avatar

        > I would assume Tesla’s decision hinges on China’s future plans to increase electic car use.

        That’s perhaps part of it in the long run. The more relevant immediate matter is that native joint ventures avoid the often onerous import tax.

    • 0 avatar

      Because of China’s pollution problems, I foresee government mandates forcing ICE off the road and making EV the thing. Frankly, considering the environmental issues there, the high cost of fuel and the public parking situations, China would be a far better country for EV. Most of the people already drive around in cars the size of the SPARK and VOLT – and not for very long distances – in ridiculous amounts of traffic. And since the PRC has the political will and power to “make it so”, they can get it accomplished far faster than America could.

      • 0 avatar
        Hummer

        PRC has the will because they don’t have to worry about human rights violations.

        Don’t get me wrong, more people in EVs in china is cheaper fuel here for me.

        I’m simply looking at it from a business standpoint, not political as some would like to bet. (Before I get called on it wrongly)

        • 0 avatar
          NN

          Any Chinese buying a $100k car probably has a garage or private parking spot with accessible voltage plug–or one that can be added easily. And 220V is the national standard. The air over there is filthy and people, especially the wealthy, are very concerned about it. Tesla, as the first high-end and stylish electric car, will probably do very well there.

      • 0 avatar
        healthy skeptic

        @bigtruck

        Even though I’m usually a staunch defender of EVs, and quick to challenge popular misperceptions that they aren’t really better for the environment (yes, in fact they are), in China the environmental benefit would be kind of dubious. The reason is that China gets the vast majority of its electricity from very dirty coal plants. Here in the US, coal is only about 40%, and our plants are generally cleaner, as is the type of coal we burn.

        Even so, China’s grid will no doubt get greener in the future, so in the end EVs are still a good idea there.

        • 0 avatar
          Dr. Kenneth Noisewater

          The concept of base load applies in China just as much as it does everywhere else. Electric cars are typically charged at night, when much off-peak base load goes unused.

          EVs using it when it would otherwise just go to waste improves profit for the utility with little additional environmental impact, while reducing point pollution and NOx from burning petroleum during ozone-prone daylight hours.

          Plus, there’s the whole Chinese actually going hardcore into nuclear thing, without NIMBY concerns that will probably end up having the US buying mass-produced LFTRs from them in 10-15 years.

          • 0 avatar
            healthy skeptic

            You’re right in that most cars recharge off-peak, which is good for grid capacity, but my understanding is that little generation actually gets wasted. They just spool down generation at night, which is particularly easy with nat gas plants.

          • 0 avatar
            Dr. Kenneth Noisewater

            NG plants are used for both base and peak load, but coal plants are pretty much exclusively base load, and as base load they’re only brought down for maintenance or emergencies.

            (And yet another neat thing about LFTR.. It could be used for peak load if you wanted to, as it’s basically thermally driven; The more heat you draw from the reaction the more fission occurs to bring it back to equilibrium, and the less heat you draw the less fission occurs. http://nucleargreen.blogspot.com/2009/03/q-on-lftr-load-following-peak-load.html )

    • 0 avatar
      VoGo

      How many trillions of dollars do we have to spend propping up “friendly” middle east governments before the Koch mouthpieces figure out that the US government already subsidizes ICE? How many soldiers have to die in Kuwait, Iraq and Afghanistan?

      • 0 avatar
        Hummer

        How many times do you have to be told we get the majority of our petroleum from NA?
        How many billions does Soros spend to keep people believing that ICE engines are the crux of everything wrong in the world.
        Pull our troops out of the ME, if they keep messing with us, bomb them and their oil to the Middle Ages.

        • 0 avatar
          VoGo

          Fungible: being of such a nature that one part or quantity may be replaced by another equal part or quantity in the satisfaction of an obligation

          Whether the oil we use comes from Norway, Venezuela or Osama’s butt isn’t the issue. So long as we are dependent on imported oil, the middle east, Russia and Venezuela – as major producers – have the power to shut down our economy.

          Rational governments, seeing this and wanting to avoid more dead soldiers and deficits, take steps to remove subsidies for ICE and add subsidies for alternatives.

          This may not be the best thing for the short term job prospects of someone working in the oil industry, but it is best for our nation.

        • 0 avatar
          Carlson Fan

          Doesn’t matter if we get the the majority of oil from the NA. The reality is you stop the flow of oil from the ME and this country shuts down.

          • 0 avatar
            Hummer

            Mutual assured destruction, another problem.
            Energy independence won’t prevent the possibility but it will mitigate its effects.

            That’s why ND oil sands, WV coal, and nationwide NG need to be readied.

        • 0 avatar
          Dr. Kenneth Noisewater

          Good, then the US can scale back CENTCOM and reduce the cost of its military, since access to ME oil isn’t nearly as critical as people think.

      • 0 avatar
        Master Baiter

        We have volunteer armed services. No one is fighting in the ME against his/her will.

        • 0 avatar

          > We have volunteer armed services. No one is fighting in the ME against his/her will.

          The armed forces is largely an employer of last resort. Those “volunteering” to fight in the ME do so out of the inability of will alone to create money.

          • 0 avatar
            wolfinator

            Exactly. The armed forces are “volunteer” largely in the same way that 1930′s black sharecroppers in the South were “voluntarily” in their position.

            The armed forces feed off the poor. The non-commissioned ranks are basically a pool of relatively well-paying government jobs offered to the young and poor.

            I don’t necessarily object to that, but it’s important to realize when blabbering about how it’s totally OK to pointlessly kill our young men in uniform because they “volunteered”.

  • avatar

    So much better than building them in America and exporting them to China.

    Imagine if America actually opened trade with Cuba, Iran, North Korea and actually PRODUCED stuff to export.

    Call me stupid but we might actually have more jobs for Americans and less enemies.

    The capitalist in me wants my TESLA shares to skyrocket as high as they’ll go.

    The protectionist in me would give up every single dime I have to put my country above all others.

    • 0 avatar
      healthy skeptic

      Global economics and America’s own interests are not necessarily mutually exclusive.

      The free-thinker in me thinks that about 97% of the time, protectionism is a bad idea all around, particularly in the long run.

  • avatar
    boomhauer

    I’m surprised Musk wants to build there. If he does, he’ll put all his Intellectual Property (IP) at risk. China takes all it has in their hands, copies it and sells it back to America.

    http://www.inc.com/drew-greenblatt/dear-china-stop-stealing-my-intellectual-property.html


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