United States, China and Norway. These are the three markets that Tesla wants to win. The best way to gauge Tesla’s interest is to take a look at their supercharging network.
United States remains top priority, followed by China and then Norway. At the end of 2017, Tesla had 1,021 Superchargers in China and the plan is to double capacity in 2018.
Chinese EV market is second to none:
China is the largest market for EV’s, with more than 777,000 vehicles sold in 2017, an increase of 53% compared to 2016.That growth will continue to accelerate as China is desperate to control pollution and its rising oil bills.
But things were not favorable on the ground for overseas players like Tesla, unless they join hands with local auto makers. Tesla has refused to take that route and as a result it has been slapped with excise and duty charges making Tesla cars expensive for Chinese customers.
Price of Tesla cars dropped by 6% after China reduced tariffs this year. Even after the cut, Tesla cars remain pricey in China, pushing them to compete in a higher segment than required. According to Bloomberg, the price of Model S is $111,000 and Model X will you set you back by $121,000.
Despite all the pricing problems, Chinese customers continue to embrace Tesla. Tesla sold 14,883 cars in China last year, doubling its 2016 numbers.
“Tesla was off to a tough start in China in 2014 and 2015, but things started to improve for them in the country in 2016 when they managed to triple their sales to over $1 billion during the year.
The automaker wasn’t able to maintain the insane growth rate in 2017, but the company confirmed today that it still managed to double sales in China to over $2 billion in 2017.” – Electrek
Tesla China has increased sales six fold in the last two years. Tesla needs China more than China needs Tesla.
Car makers are no longer needed to have a local partner, thanks to Chinese government’s recent decision to do away with ownership restrictions. The best way to accelerate sales would be to set up a production facility in China.
But it’s easier said than done. Building factories need money, that too in the billions. Tesla has couple of billions on hand, but it needs lot more than that for ramping up Model 3 production.
There is no chance for Tesla to invest in building a factory in China. Not right now. The Chinese factory will have to wait, at least till 2019 or even 2020.