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Tesla says NO to Aussie offer of factories

Tesla says NO to Aussie offer of factories

Ross1 | 17. April 2016

Wow it escaped the filter-with-holes

Federal and South Aus both been politely knocked back

Red Sage ca us | 17. April 2016

Someone had mentioned that Australia would not be willing to accept Tesla Motors vehicles if they were manufactured in China... Is that true?

bj | 17. April 2016

Well you can buy Cherys, Great Walls and Fotons in Australia, so that claim is a load of rubbish.

skirtsanis | 17. April 2016

That's very disappointing would of lowered cost of Teslas massive looks like I'll be paying 25k in taxes so much for a cheap car 65k base price

chris | 18. April 2016

@bj yes those cars are on sale in Australia, but very few people buy them. No other manufacturer sells a Chinese-made vehicle n Australia, and I for one would not buy one.

bj | 18. April 2016

@chris - why not? Just about everything else we buy is made in China!

But on a slightly more serious note, the original claim was that "Australia would not be willing to accept Tesla Motors vehicles if they were manufactured in China", i.e. Tesla would not be permitted by the government to sell them here if they were made in China. That is not the same thing as to whether people would want to buy them if they were made in China.

I disproved the original assertion by listing some of the Chinese car brands sold here. Clearly the Australian government imposes no such bans on cars made in China. It would violate the Free Trade Agreement for starters.

carlk | 18. April 2016

@Red,

There is no reason for Tesla to ship China manufactured car to Australia or any place else. The only reason to manufacture car there is to avoid the heavy duty Chinese would impose for cars not manufactured there by Chinese majority owned company.

Ross1 | 18. April 2016

I live in AUS.
I bought some Chinese stuff from Ebay and lived to regret.

Chainsaw: looked like a Stihl but garbage. Had a German name.
Rotary hoe: Chinese motor. Trash Chonda some people call them.
Compactor: Chonda, got rid of it real quick.

Macbook Pro chargers, 2, they have no safety control like the genuine Apple and burned themselves out and burned my Mac which cost a lot to repair.

A Chinese Tesla? Really?

Ross1 | 18. April 2016

The point with AUS offering factories is that our car manufacturing is closing down, GM, Ford, Toyota, Mitsubishi.
In favour of imports. Mostly Thailand.
(However the RHD Mustang is being imported and sold out for what, 18 months. Like M3 here.)

Visionaries could see Tesla might be a good fit to these factories a la Fremont.

Ross1 | 18. April 2016

And generally there are no incentives (except in the Fed capital), but subsidising setup costs and factories is a viable alternative.
Subsidies are not a real good thing. Ask any New Zealander or Common Market.

DTsea | 18. April 2016

Not going to happen. Australia market is too small to absorb the output, and Australian costs are too high to support export. Thats why those factories are shutting down already. Not to mention the strike prone labor force at those plants.

Bighorn | 18. April 2016

It's a prison colony

SCCRENDO | 18. April 2016

Isn't prison labor cheap?. A friend applied for a visa to visit Australia. On the form it asked about his criminal record. He responded that he didn't realize it was still a requirement. Sorry Aussies. Just kidding. We love you. But it seems their is insufficient incentive for Tesla to build there.

georgehawley.fl.us | 18. April 2016

Maybe they could make the license plates in Australia. :-))

compchat | 18. April 2016

I've said it before. Elon should not support China by building a factory there no matter what the demand. If China wants to be part of the "global" economy it should play nice (and fair). Also outsourcing American jobs to China, Mexico, Canada, etc. is killing the US economy. How about shipping the cars there. If they really want them than they won't impose penalties. Otherwise, well, as the saying goes....tough _ _ _ _ !

FREE ENERGY | 19. April 2016

Elon will visit my hometown very soon...an energy conference...

bj | 19. April 2016

@DTsea - Australian manufacturing costs would be comparable to those in USA, so if Tesla can make cars in California they could make them here.

And despite popular mythology, strikes are pretty rare here now.

I would have thought Australia would be a very place for Tesla to make all its RHD vehicles - serving Aus, NZ, Japan, Hong Kong, India, South Africa. Pretty centrally located to serve all RHD markets except maybe UK.

Ross1 | 19. April 2016

Toyota's biggest market for cars built in AUS was Dubai I think.

Ross1 | 19. April 2016

"The closure of the five Victorian and South Australian production facilities operated by Ford, Holden and Toyota will directly result in the loss of approximately 6600 manufacturing jobs by 2017: 2500 from Toyota’s Altona plant, 2900 from Holden’s Elizabeth vehicle plant (1600) and Port Melbourne engine plant (1300), and roughly 1200 from Ford’s Broadmeadows vehicle plant (at least 650) and Geelong engine plant (510)."

Will try to post the link...

DTsea | 19. April 2016

Bj, tesla's factories are non union. It makes a difference.

The poor labor relations in australia (according to everything i read) played a big part in the closure of those plants.

bj | 19. April 2016

@DTsea - then what you've read is wrong. Closure is due to many factors, "poor labour relations" was not one of them.

The very high Australian dollar from 2010-2014 really killed the export market, and domestic demand was never going to be enough to sustain production. The multinationals that run the factories naturally looked across all their global production facilities and considered what would work best for them as margins continue to get squeezed.

Also the current government in 2014 basically dared Toyota, Ford and Holden (GM) to shut the factories down, saying they would no longer provide any assistance or subsidies to keep them open. The carmakers called the Government's bluff and pulled the plug.

The Govt then changed its mind and offered to continue some subsidies (due to intense political backlash from their constituents in carmaking areas) but too late. The fund has now turned into an industry transition assistance package.

The car factories in Australia were highly automated, very modern by world standards, and I suspect labour costs were only a small proportion of the overall running cost of production hence not the main factor.

SCCRENDO | 19. April 2016

Elon is being patriotic and helping the US and California and Nevada economy. Even if the situation is similar in Australia why should he. When Australians begin to buy cars in mass perhaps there may be an incentive. If he is exporting jobs at least he should do it for the cheap labor

SCCRENDO | 19. April 2016

Elon is being patriotic and helping the US and California and Nevada economy. Even if the situation is similar in Australia why should he. When Australians begin to buy cars in mass perhaps there may be an incentive. If he is exporting jobs at least he should do it for the cheap labor

Ross1 | 20. April 2016

AUS car sales for each year = 1 million

SCCRENDO | 20. April 2016

@Ross. Teslas in mass.

DTsea | 20. April 2016

Academic article on nissan inability to establish lean production in AUS due to union resistance

http://www.tandfonline.com/doi/abs/10.1080/00236560701418062?journalCode...

Article on massive losses in Aus car induatry, plants that are far below economy of scale, and labor cost 4X neighboring countries

http://www.couriermail.com.au/news/why-australias-car-manufacturers-toyo...

Strikes at holden plant 2013

http://www.theaustralian.com.au/opinion/columnists/be-holden-to-us-all-c...

I really like australia but it is very hard for an isolated nation with a small population to maintain a large industrial base.

Ross1 | 20. April 2016

@ SCCRENDO:

(Teslas in mass)
you mean TESLA is a religion?
Naaah. Couldn't possibly be.
Well. Ummm

bj | 20. April 2016

@DTsea - two examples of "union resistance" in 3 years do not constitute a strike-prone workforce. And it's not surprising that Australian labour costs are 4x neighbouring countries - unlike Indonesia, Vietnam, Cambodia, Philippines, PNG etc, Australia is a developed nation. Is the USA aspiring to be Colombia or Paraguay in order to get its labour costs down?

As I pointed out, labour costs are clearly not the problem when our labour costs are comparable to yours and yet Tesla still makes all its cars in USA. Having access to a highly skilled and educated workforce, as well as access to developed nation infrastructure, are clearly important as well to make a quality product.

The articles reinforce my point - without a large export market, killed by a high $A, domestic demand was never going to be enough to sustain a viable industry. 250k cars per year the minimum to be viable, 1M per year would be better. But if you had just one carmaker churning out those volumes for all RHD markets it could be viable.

Anyways, I don't think much can be added to this debate. At some point Tesla will need to develop manufacturing plants in places other than USA if it truly aspires scale. Australia may or may not be a candidate for that when the time comes.

Ross1 | 21. April 2016

Minimum wage in Australia is $17.29 ph.
In USA it is $7.25