Why is Tesla Motors not selling any Model S or Model X cars in China? There is a huge market over there (with very big volumes).

Why is Tesla Motors not selling any Model S or Model X cars in China? There is a huge market over there (with very big volumes).

Why is Tesla Motors not selling many more cars in China? There is a huge market over there (very big volumes). The Chinese Government is also investing a lot in charging stations for EV's. I have read somewhere that the new SAAB cars are going to be EV's. They are going to be produced somewhere in Sweden for the Chinese market. Any thoughts about that?

sandman | 30 January, 2013

China has some huge incentives to convert its personal transport to alternative fuel vehicles.

However, and this is just my guess:
1) Tesla doesn't want the demand that China would/could yield yet. In fact it may hurt to have too much demand until certain production/quality/reliability metrics are met.

2) Getting access to the China market especially for something as large a purchase as an auto requires a lot of negotiation and concessions. For some industry this means planting a certain percentage of R&D or manufacturing in China. Touchy subject for a lot of small companies.

In any case, Tesla is working on it. See job opening for China Manager:

GeirT | 30 January, 2013

China is one thing but look at smaller affluent and developed markets like Taiwan that is civilised what regulation etc is concerned. A relatively small island with 23.5 million, with a comparatively affluent population and tradition for a significant number of luxury cars: Mercedes, BMW, Lexus, with a Bentley outlet, Rolls Royce, Maserati, Lamborghini etc. Even a Harley Davidson dealer down the road from my office.
Taiwan would simply be ideal for a number of cars that could be manageable by a small company like TM.

ir | 30 January, 2013

I don't see the price point and manufacturing capacity meeting the needs of Chinese consumers yet. I'm sure Tesla will enter the Chinese market eventually when the time is right.

On my business trips to Beijing 99.99% of transportation are ICE, human powered or assisted bicycles. Not a single hybrid to be seen. Nobody there feels that large scale green tech can justify the cost right now.

As for charging infrastructure, never saw a single car charger anywhere. The bikes have detachable batteries that riders carry up to their apartments to charge overnight. The government heavily subsidizes electric heating, so in the winter the coal power plants run at 100% day & night. Hence the crazy off-the-scale pollution levels that peak at night.

Besides selling a few "trophy" cars for a few super rich, I don't expect to see any Model S / X in Beijing in the next few years.

Norbert.Vienna | 30 January, 2013

I like to put your attention to the job page on this site. Tesla is looking for a Director for China, they will open an office this year showing Modell S

Robert22 | 30 January, 2013

More likely is the fact that the Chinese would probably have the first car off the boat reverse-engineered down to the screws within hours. 60 minutes did a nice segment on this a few months ago. No one wants to end up like Cisco.

jat | 30 January, 2013

@Robert22 - I am sure if they want to reverse engineer a Model S they can obtain one and have it shipped there.

Besides, they will soon own Fisker :).

Benz | 30 January, 2013

Yeah that's right, I heard about it on a small news item on Bloomberg, 2 days ago. What did she say? Yes, production of the Fisker Karma was stopped, because there were problems with funding I believe. Therefore, the owner of Fisker Karma was looking to sell Fisker Karma. And the supplier of the battery packs (that were used in the Fisker Karma) was not delivering anymore and was looking for a new owner themselves as well.

So, you think that the Chinese will soon buy Fisker Karma? Possible, as they already have SAAB and Volvo. What about TATA from India? They already have Jaguar and Landrover. Maybe they are interested as well? TATA is going to produce a small EV as well, it's going to be called the "Megapixel".

garyrudolph | 30 January, 2013

China already is getting experience in EV with Coda where manufacturing is already happening in China. They've also partnered on sharing the design with Great Wall Motors. I'm not sure Tesla would really want to do similar to compete to that level.

I'm not sure reverse engineering is a concern. If any company in China was that interested they would simply by one in the US and ship it over.

andrigtmiller | 30 January, 2013

My understanding with China is you have to have a Chinese automotive partner to enter their market, which makes it more complex. You cannot just enter their market alone.

bradslee | 30 January, 2013

That Tesla Model S goes into China market would be more in the sense of brand marketing rather than any meaningful sales of a top end EV auto. However, selling Tesla Model S in China will have the following challenges to say the least: (1) even if there are enough wealthy Chinese can afford this car (equivalent BMW M5 in China sells for 1.85M RMB=US$300,000), many of them would have trouble to charge Model S at home, not even thinking about charging the car along a trip; (2) Just like iPad situation in China, since Tesla trademark has been registered by some Chinese in China, Tesla will probably face a ridiculous lawsuit challenging its brand selling in China; (3) there are so many EV copycat manufacturers in China, Chinese will soon make Tesla look like EVs (of course not at the same quality and elegance) at 1/10 of Tesla's sales price on the China market. Yet, when I talk to wealthy Chinese business people about my Tesla Model S and show them the pictures of my Model S, their eyes are wide-open with big "wow". They have never seen anything like that before. Therefore, I think that wealthy Chinese would consider Model S just like their status symbol collections of Aston Martin, Bentley, Ferrari, Lamborghini, Maserati and Rolls-Royce.

Benz | 30 January, 2013

@ andrigtmiller

"My understanding with China is you have to have a Chinese automotive partner to enter their market, which makes it more complex. You cannot just enter their market alone."

That could be the main reason, and it would explain it. But do you have more info on that?

bradslee | 30 January, 2013

Benz, regarding a foreign auto manufacturer must partner with a local Chinese auto manufacturer in order to enter the China market, it refers to that if a foreign auto maker wants to build cars in China and to sell those made-in-China cars, the foreign auto maker cannot do it alone and must partner with a Chinese auto maker. However, on China market, any foreign auto makers can sell imported foreign cars like Ferrari or Lamborghini. In that aspect, the foreign auto maker does not need to partner with any local Chinese auto makers. This is my two cents.

biwamura | 30 January, 2013

Probably because the import tax makes the car unaffordable.

murraypetera | 30 January, 2013

China requires that they get access to the tech.
Lets chineese companies steal in the open. No need to reverse eng.

dahtye | 30 January, 2013

China really needs to get on the BEV bandwagon. Some parts are on "smog alert" due to the millions of cars being added yearly.

tvntesla | 31 January, 2013

I think that very soon, Chinese will "improve" Tesla Model S and begin selling it in mass all over the world before Tesla Motors does.

They did that with Apple iPhones (you can buy an exact copy on the street), Russian fighter jets
and Siemens high speed trains.

I would not be surprised if Chinese are going after the Model S and "improve" it. They do not have to buy the car to ship it to China. They hack into the network to get the design and infiltrate Tesla factory right in California and see how it is built. That is in their trade.

Better and cheaper, here you go!

Robert22 | 31 January, 2013

@ jat-

There's no advantage to selling in China and a lot to lose. Eventually they'll tear one down in the US and ship it back piece by piece so it's more a matter of delaying the inevitable.

Keith72 | 1 February, 2013

I've worked mainly in China for the past 8 years. My colleagues are excited when I share details on my upcoming delivery (got my VIN this week), but claim electric cars are not for China - yet. No infrastructure for charging. However once China decides to move forward on something it happens fast (getting there takes time). They could install the infrastructure quickly once they decide to do it. Pricing is not an issue, you can see the affluence in all major cities. In Nanjing and Shanghai I see Bentley, Lamgorghini, Maserati, Porsche, Rolls Royce, etc. In addition, manufacturers worry about Intellectual Property - no such thing in most of Asia. The Chinese will steal your IP in a minute, and the Koreans even faster.

jat | 1 February, 2013

@Robert22 -- that is exactly what I said above.

DHinLA | 7 August, 2013

The real reason why Tesla is not selling in China is because the trade name "Tesla" was already registered by a business man in China, years before Tesla Motors became a profitable company. Tesla has been engaged in litigation against this trademark troll, who is asking for 200,000,000 RMB (Exchange rate is $1 USD= 6 RMB). For some reason western media has not picked up on this headline news item in China:

The news article above (in Chinese language) says that Tesla may opt to change its name for the Chinese market, because Elon Musk does not want to cave in to the trademark troll's demands.

It is true that many Chinese firms engage in unethical practice of IP theft. However the fact is this is a market with 20% of humanity, I don't see how a relevant automaker like Tesla can stand to ignore it.

Benz | 7 August, 2013

My understanding of the Chinese language has never been that good. Can somebody translate this news article?

GeirT | 7 August, 2013
ajkim26 | 7 August, 2013

If they want demand in china they need to go big in South Korea.

bradslee | 7 August, 2013

I do not think the TM's delay into China is due to some trademark troll's holding up Tesla's Chinese trademark. Based on the information provided by Mr. Shen, general manager of Tesla Motors of China (that was also reported by Dana Hull from San Jose Mercury News), the delay has been due to the Chinese governmental approval process (both with the Commerce Ministry and National Industry and Commerce Bureau). In a very recent email to me from Mr. George Blankenship, he also confirmed that "We are still working through a few details in China before we start sales there."

Folks, just be patient. TM will sell MS in China fairly soon!

HenryT2 | 7 August, 2013

I believe the biggest problem with widespread adoption in China, or South Korea, Singapore and a number of other countries, is that many potential Tesla buyers (people who can afford a $60-100K car) live in apartments. The market in most of the biggest, wealthiest cities is something like Manhattan. A person might have the income for a $100K car, but doesn't have the space or charging infrastructure for an EV. In those markets, without 10min. superchargers spread throughout the city, I think it would take a long time before we see a widespread Tesla presence.

GsooMon3y | 7 August, 2013

Just read that the "Tesla" name was bagged in 2009 by a name trademark troll and he wants $326,000,000 for the rights in China. Their business application was rejected on that premise.

bradslee | 7 August, 2013

In TM's Q2 2013 shareholder letter, TM confirms that they will open its first store in China in 2013. As a matter of fact, TM now has several job openings for its Beijing service center and store, Shanghai service center and store as well as Shenzhen store. It looks like TM will establish its presence in Shanghai and Shenzhen after Beijing. TM is going into China market!

GeirT | 7 August, 2013

@ HenryT2

Wealthy people here (Shanghai) rightfully live in apartments but don't forget that those are modern complexes with guarded basement garages. Would be no problem of putting up a charging points there for the owners. They have had this for electric scooters for a long time (of course, not comparable...)

Brian H | 7 August, 2013

I think you're off by a factor of 10.

Read of someone in Singapore who had a private elevator and "sitting room" for his Tesla in a penthouse.

carlk | 7 August, 2013

Elon said in the earning conference call today Tesla will do some modification to Chinese model to make back seats more comfortable since that's where many of the buyers would sit.

HenryT2 | 7 August, 2013

I'm sure it's "possible" but is it likely? I'm not sure how many 50A circuits they would be prepared to put in, both logistically and in terms of motivation. They have to consider that if they do it for one person, they have to be prepared to do it for everyone. Until there is enough demand for that facility, I don't think they'd want to "go through the trouble". And until they "go through the trouble", no one will want to buy an EV.

@Brian H
I'm fairly certain a guy like that isn't your run of the mill Tesla buyer. If he's not a Billionaire, he's worth hundreds of millions. But your average guy earning $50-100K+ per year (Asians often spend far more per dollar income than us Westerners do) aren't likely to live in an apartment building with EV facilities let alone private elevators.

GeirT | 8 August, 2013

@ HenryT2

Should not be a need for 50A in a garage. As in Norway a 230V 16A 3-phase or 32A single would be fine. That will be paid for by the user/owner. There are thousands with access to apartment complexes in Shanghai alone that could cater for that. I would think Tesla for now would be happy enough to sell a couple of thousand cars here, over the next year or two - not to aim for 'millions'.
I don't even think SCs at least in a first phase is a must. The range of a 85kw battery package should be sufficient for most thus lack of SCs not a deal breaker.

Of course there are obstacles and of course a new way of thinking is required. But if Chinese set their mind to something you bet there will be solutions - and damned quick as well.

Once again, your points are valid but I do however see more opportunities in China than challenges. And challenges is as we know not new to Tesla, that has been breaking barriers for many years already.

Dr. Bob Reinke | 14 August, 2013

Perhaps, Elon doesn't want to see a Chesla Model S or a Chesla Model X being shipped to the United States and sold for half the Tesla price. Identical to the Tesla cars in every aspect except built by slave and prisoners and children and from the substandard badly copied parts from the Cars Tesla sold in China.
I have seen a major US manufacturer of machine tool control systems driven out of business in exactly that fashion. A smart CEO would make sure there is some insurrance in place before dealing with China where profit and winning are paramount.