Will Tesla Expand in China, Or Head the Export Route?

Tim Healey
by Tim Healey

What does the future hold for Tesla in China? Expansion, or exports?

That’s the question being asked by an Automotive News story today.

Earlier this year, the outlook for Tesla in China looked rosy. But net orders for cars have fallen by nearly half this quarter amid concerns about the company’s vehicle safety, along with how it collects and stores data, and at least one report suggests that the company could end up exporting cars produced in China to Europe.

Not long ago, analysts were predicting expansion for Tesla in China. One analyst mentioned that in addition to planned plants in Texas and Berlin, Tesla could build another factory in China.

China’s Passenger Car Association will release May’s sales data next week. Sales dropped more than 25 percent from March to April, with more than half of the over 25,000 cars produced in China being exported.

Tesla stock did rise a bit in Friday’s early trading after a slight fall on Thursday, though the stock is down 35 percent from its peak in January.

For reference, China is the second-biggest market for Tesla, following the U.S. It builds Model 3 and Model Y vehicles in Shanghai.

Like the analysts, we too are curious about what happens. Tesla appears to be at a crossroads in China — if expansion was in the cards, it would obviously be great news for Elon Musk and company. Not just because growth is generally good, but because China is obviously a huge market. The country’s EV market is arguably more competitive than here, thanks to the presence of both several startups and more traditional automakers like BYD that build EVs, with roughly 20 makes in play, but Tesla shipped a half-million units there in 2020.

Obviously, the company would prefer to sell Chinese-made Teslas in China instead of shipping them to other markets. But the company has been dealing with a series of headaches for quite some time now. Between concerns about reliability here in the States and the ability of Teslas equipped with autonomous-driving software to perform those functions in a safe manner, and concerns about data, Tesla has enough headaches to make Musk want to take some time off to host a comedy show. Oh, wait.

All this would seem to confirm earlier reports that we highlighted regarding canceled expansion plans at the Shanghai plant.

At the moment, it sure looks like contraction, rather than expansion, is the name of Tesla’s China game.

[Image: Tesla]

Tim Healey
Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

More by Tim Healey

Comments
Join the conversation
13 of 30 comments
  • Kendahl Kendahl on Jun 04, 2021

    For some time, Teslas have been coming to the United Kingdom from China instead of California. There are several YouTube videos comparing quality of cars from the two different sources. Chinese and California cars also come with different battery technologies.

    • See 8 previous
    • Mcs Mcs on Jun 05, 2021

      @luke: Yeah, I kind of like that idea too. No nickel, so it's cheaper. The 4680 tabless and the other technology should push the gravimetric density up. Nickel availability and cost favor your theory.

  • Slavuta Slavuta on Jun 04, 2021

    I think something is brewing in China because Musk is now looking for Russia https://www.cnn.com/2021/05/21/business/elon-musk-tesla-russia/index.html

    • See 1 previous
    • Slavuta Slavuta on Jun 06, 2021

      @Luke42 And I love this model. I always said that American company mast make in the US what they sell in US. If they want to make something outside US - make it anywhere you want. Perfect.

  • Hari Your route home sounds like the perfect stretch for a car like the Alfa Romeo Giulia. Its renowned handling and dynamic performance make it an ideal match for those curves. For enthusiasts or potential owners interested in understanding all the capabilities of the Giulia 2017, the owner’s manual is an invaluable resource. Check it out here: https://chatwithmanuals.com/automobiles/2017-alfa-romeo-giulia-owners-manual/. Our AI-powered chat makes navigating the manual simple, helping you quickly find specific details about the car's features and specs. Perfect for making the most out of those driving moments and truly understanding your vehicle!
  • Dale I'd consider the RAV4 if the Prime were on the table as paying for gas is for suckers. Otherwise, we have a couple of Mazdas and they are swell. I've driven older versions of both and the CX-5 is a nicer place to live.
  • Haran Spot-on review of the Mercedes-AMG GT’s price adjustments and new features! For those intrigued by the all-wheel drive and enhanced features of the latest model, you can delve deeper with the complete operator's manual available here: https://chatwithmanuals.com/automobiles/mercedes-amg-gt-operators-manual-edition-c2020/. It’s a fantastic resource for understanding all the specs and new additions without getting bogged down by the complexity typically associated with car manuals. Chat with the manual using AI to quickly find exactly what you need to know about this sporty beast. Perfect for those who appreciate detailed insights on their luxury investments!
  • Flashindapan Beautiful color combinations. I assumed they stop selling the TT here at least five or six years ago.
  • Carson D Just don't be the whistleblower who reports on the falsification of safety data. That's a deadly profession.
Next