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How big of a market is China for TM?

This is just one of many recent article detailing the smog in China.

If early adopters in CA is any indication, then the more affluent Chinese population should be jumping all over MS.

What if TM can accelerate Gen3 development, introduce electric buses, or electric bike? How much more market shares can TM capture in the ultra polluted market?

Sooner or later those Chinese cities will ban ICE cars on city streets. That will be a great opportunity for Tesla. London already has the ban for all gas and diesel powered cars and EU has a grand plan to do the same by 2050. China with the authoritarian system don't need to wait that long. They can impose the ban overnight when they see fit. People who buy MB or Audi there now should keep that in mind.

China doesn't want Tesla to dominate their market. Maybe allow a small market share to keep up appearance of playing nice.

China isn't afraid of Tesla because Tesla will not be reaching numbers that would mean dominance. China has a great interest in electric vehicle proliferation since it does not wan't to be hooked on oil.

Tesla can only halp that. China has some of the highest subsidies for electric vehicles in the world. 16.000 USD, etc..

China will copy it!
Ask BMW who had their X5 copied and then lost the legal battle in a Chinese court. The Chinese have no scruples, none what-so-ever. It will be suicide for Tesla to go there. Maybe some short term gains until the Model S is copied then it will be game over.

They can clone the exterior design but the internal mechanic is a whole different story.

The Chinese factories have cloned pretty much all the best selling foreign luxury design. But these clones could never pass any crash tests. Their performance can never match up to the originals either.

TM will have no problems going against water downed imitations.

The real issue is not how big Chinese EV market is. China's smog problem has reached to a point where the breath with a clean air becomes luxury. Thus anything or any method can reduce the smog would be in great demand. Yet the real issue remains as whether Tesla can break the barrier built by the Chinese government. The delay of opening the first Chinese Tesla showroom in Beijing exemplifies the existence of such barrier.

I doubt China will ban ICE cars. But it still is a great opportunity for Tesla. 60% of Tesla cars will sell in North America, 20% in China, 20% in Europe. How's that as a forecast?

China is a proud country. Sometimes, proud by force. They live by the term "saving face". They want to copy and make much the stuff western society makes but make it themselves. They have various e-bikes, e-scooters, EVs and growing all the time. Tesla is expensive as an import - but there is always thought that Tesla will partner with and build cars in China longer-term once they can get the right partner. Tesla is still small in terms of cash-flow and is going to need to grow domestically in the USA and Europe first before a big expansion into Asia can commence. GM and F have to build cars in-country in order to compete there. And they compete well - with GM selling more units in China than in the USA.

There was a news reported in China recently about the very first model S P85 bought by a wealthy young man from the east coast province of Zhejiang. He paid a total of 2.5M RMB (equivalent to $407,830) including all tariff and taxes for the fully loaded car. As a matter of fact, his MS was not bought inside China but was instead bought in Hong Kong and was imported into China. Since TM has not cleared all hurdles in China legally selling MS, this very first MS bought and imported by a Chinese citizen in China can only be viewed and admired but cannot be driven on Chinese road. How sad it is!

@bonaire -

TM should NEVER partner with a local Chinese mfr. Partnership in China = license to steal. Once the locals gain the internal knowledge to produce the EV, they'll abandon the partnership and leave TM in the cold.

Why do you think some of the Chinese knockoffs are almost indistinguishable from the legitimate ones?

US companies contract Chinese factories to manufacture their products to spec and material during the day shifts. Then these factories produce knockoffs during night shifts using inferior materials while copying the same blue prints from the day shifts.

Hold on... remember that China produces most of what US companies market?

China is difficult admittedly but handled right China is no different than for example nationalistic France or ... US for foreigners.

True, they steal you blind if you rush in and is "Mr.Know It All" but with a certain cultural connection and understanding China is the place where everything is possible. Just as it used to be in Europe a 100 years ago, the or US 50 years ago. Now both are in many weays more Soviet than the Soviet Union was, regulatory wise.

Geely will for certain try to copy - as they did with Rolls Royce, and what a bummer that was! - and there is a host of super good battery technology companies that also would like to partake in the exciting EV future.

Point is that in China, as everywhere else, nothing is as good the real deal. What are the cars roaming the streets of Beijing and Shanghai? Local Japanese varieties, Buick (a top brand!), Citroens, VW, Audi - all made locally. I think I once read that actually GM sells more cars in China than in the US. Correct me if I am wrong - but it is at least close to.

Tesla needs Proper People to handle their China business that knows western culture AND Chinese business culture to make this happen positively. Not to conquer the entire EV market potential but to get a fair share, and a huge part of the luxury market. It is indeed very possible.

I have stated it before in this forum and will repeat: rich people in China long for the Model S. It will be a huge statement. The number of rich people in China is more than what is in Europe and the US combined! They will not use the car between the regional capitals but locally, in their cities. The range 300 miles range is more than enough.

The Chinese "can do" attitude may easily develop new and exciting solutions for Tesla to move forward. Partnerships with extremely smart people can be forged.

I am no member of the Communist Party (what a joke! Old lenin is propelling in his mausoleum) but I have been working with and in China since 1984 (...also an irony) and do my business very well here. It is a matter of "behaving" according to local rules and expectations.

For westerners that is in general a HUGE problem. Don't blame the Chinese for being Chinese, blame your own unpreparedness and unpreparedness for doing business here. As allway and no matter where you are, you must know what you are doing!

A quick Amazon search on Chinese business literature is a good start for plenty a good advise.

Model S will do great in China! The GenIII more dubious as we have no idea what this is all about.
A dynamic market with growth and 1.4 billion people is somewhere to stay away from? Sure, if you are a museum custodian. Tesla is not, so just do it - but for Gods sake do it right!

I opened a fortune cookie the other day which said "A happy Tesla is a pruged in Tesla" :-)

@Rheumboy - Do you mean "plugged-in"? My chingrish is way off on this one...

Sorry, Brian H is slacking off...

Yes prugged in...sorry

Elon said in one of the recent interviews that China has 54% of world's luxury sedan market. He and his electric cars will go there, independent of what this forum says or doesn't say:-)

My recent encounter with colleague from China is consistent with the high potential for Model S to do well there.

China is a place where anything can be possible and anything can be impossible.

Gentlemen, like it or not, the global economy stands today because when the western bubble burst, China and subsequently India and Brasil managed to blow their bubbles with spending measures (which failed completely in western world initially), to replace the fall in global economic demand and activity.

In 2009 their sales of cars grew by 50% and for flats by 100%. They bought all the Fords, Chevys, GMs, Intel processors, etc.. we were too scared to buy then. Luxury brands were off by some 80% in spring of 2009 in developed world. It was only when investors saw Chinese buying that they calmed down a bit.

Without it, we would be at 40% unemployment and none of you would own a Tesla now. When one looks at US, China and Russia and is neither, one can instantly spot that all have people who grew up with an ideology which demonized the other. China has serious issues but some they are solving better than US.
US has issues and some are solved better than anywhere else. Russia is trying a bit of both and sometimes gets it right and sometimes doesn't.

As far as copying goes, US got loads of science and tech from German Nazi scientists, as did Russians, etc.. Tesla's technology isn't really Tesla's so one could argue they copied it, etc..

I'm just saying, those of you who are very emotional may just be a bit overly emotional on these topics. If China is anything for Tesla, then its a market. By far the first thing on the list. Chinese are already expensive now and don't want to be cheap labor. They put up with it to get to where the west is. Now, you are as much a manufacturer as a market for them and vice versa. Fear the day when either of the large markets fall because it takes everyone down with them. It is the 21st century. Old ideologies don't apply anymore. Today, China is every bit as likely to develop cures for cancers as EU or US, etc. Celebrate that. It could have gone another road.

Luckily, they chose the western approach, with their twist. So did Russians. We really are all fortunate the differences diminished by
so much.

I wish sometimes that western nations would impose sanctions and withold luxury goods against china until they stop their mass consumption of Shark fins, Ivory, Bear paws & gall bladders, Tiger balls, and rhino horns.

Have you read about Goophone?

It's tiger penis, not balls. They figurde the male organ from a ferocious animal is a cure for ED. There's never been any scientific proofs that it works.

You'll likely get served bulls balls or bull fighters balls in South America depending on the winner of the contest.

Proud Chinese government wants Chinese companies to build good cars. But proud Chinese people do buy vars made elsewhere. They're going for the best and Tesla does offer the best. So I think it's matter of time.

"In July, Tesla’s Hong Kong branch received over 300 orders for the vehicle, surpassing the total number of electric cars currently in the city".

The English idiom you were reaching for is "spinning in his grave", not "propelling".
And "advise" is the verb, with the z sound. "Advice" is the noun, with s sound. English has all sorts of compromises with phonetic spelling to accommodate its polyglot heritage and large homonym vocabulary.

Animal treatment certainly is a weak spot for China (it is for cattle etc in US also and in some such parts) but China is actually pursuing a more strict regime for protection of rare species, etc. Every year they a are a little bit more strict. They prefer longer and softer transitions. I don't
think they want to anger 1 billion people if they can do without it in a
year or two longer.

Before the Olympics, it was nomal in China to spit on the floors, even in taxis, buses and restaurants. It was considered cleansing to the body.
Then in one year of public campaign, they moved the public away from that because they knew it would gross western visitors out, etc.

Imagine a large nation in Sim city :) They make slow but directed transitions.

Western countries don't impose any sanctions of luxury goods to China because it is the Chinese market that allowed survival to those goods manufacturers.

Chinese consumers do not like Chinese cars. They go straight for German and US cars. Some day that will change, especially with electric cars, where long history is not necessary but currently, they completely ignore Chinese cars. In China it is foreigners who work there who buy Chinese cars because they are cheap and actually very reliable now.

Taxi drivers put some 500.000 km on them without major faults. But the public, as with any transitional nation, strongly prefer imports. Of anything really.

Not advocating China, just trying to balance things. Americans have notions about Chinese and Russians and Russians and Chinese about Americans but to an outside observer, knowing both, it is different pages of same leaves and just funny sometimes.

@ Brian H

Of course you are right, but remember I do the best I can with my 2. language skills. Now, propelling rather than spinning sound more... energetic don't you think? I like the potency and possibly why it came to me.

@ Car t man

2nd posting up: Spot on! I really, really would like westerners to understand that cultural differences, like them or not, is part of the equation, especially in the formulae for business success. The saying goes; "do in Rome as the Romans" and you bet it is likewise relevant "do in China as the Chinese".

From my decades long experience with and in China, to deal with that issue through someone closer to home is a smart move. Apple does this with Foxconn, my neighbour here in the Neihu district in Taipei. They produce all their i-stuff in China but controlled by the Taiwanese. Same with Wintek. Taiwanese has the western education and experience and the foundation of Chinese culture. The portal is here for safe access.

The point with all these repeated words is that I want people a) to stop demonising Chinese for giving us competition as that is blatantly silly and b) that I want Tesla to succeed in China just as VW/Audi and GM did and not fail flat on their face as Ford did, that tried, screwed up big time and failed horrendously. All related to culture. And sorry to say, but a China strategy is not best implemented through a Japanese office or venture as they try today... and understatement is that Japanese are not very popular in China (read Nanjing massacre etc.) Read the book on Ford and learn the lessons.

That said, I have no idea what Tesla do or plan in China but as the forum is somewhere to express praise, concerns and opinions, maybe, just maybe Elon reads some of this and pays a bit of attention?

Oh well. I am sure they'll do the right thing no matter our advise/opinions or not (but the Ford story was nasty...).

China's air pollution problems are not caused by autos, they're caused by coal fired electric plants, and other industrial sources.

@Rheumboy, sorry, you got your R and L confused people wrong, it's not the Chinese. (speaking as one)

China is still coal dependent but unlike in US, where lobbies are making coal stick, in China Coal tycoons are the ones investing in wind, etc. They grew fond of western perks, clean environment like in EU and parts of US included, and want to have it domestically. They learn quickly. Shortly after 2000, Beijing allowed only new large cars into center, to show progress. Shortly after, they figured out that that isn't good for them and pulled an 180 on it and began promoting cleaner cars. And they have car wrecks on many crossings, to remind people of driving more safely, etc..

Where China is ahead of US, is that it isn't really as rigid. If a republican or democrat say something, they need to stick with it for life or are attacked as flip floppers, traitors and other silly mind farts. In China, if something isn't working as planned, they change it, without heads rolling if the intent was good.

During the collapse, one of the economy ministers or secretaries issued a decree that all government officials need to smoke two packs of cigarettes a day, as a protective measure for the tobacco industry, which, even though being disgusting, employs a lot of people and was in danger of collapsing also. A week or so later, the health minister overturned it because the health costs and factors overweighed. No heads rolled since that secretary had good intentions in mind but the choice was not optimal.

In US, moronic shananigans would take place, instant ideological crap would be formed and politicians would be throwing fecies around...

One of the weaknesses in US is that the political system is so divided (on purpose) that parties are actually willing to sabotage the nation, if it means weakening the other party. Soviets are gone, so parties are screwing each other.. Republicans actually introduced a law or some measure last year, they never wanted to pass, but it was supposed to make democrats, who were expected to be against it, look bad. And democrats then intentionally supported it, so republicans scrambled to pull it in last minutes. And the other way around happens often also. That right there is idiocy that might
kill the global economy one day.

Just too much of that and it is dragging the US down. In 2000, US was about 30% of global economy. Now it is 20%. And reputation suffered greatly under Bush and with snooping, now Obama isn't helping either.

China and Russia are far from having things sorted, but over recent years, they have been improving (in most issues anyway), but US has bizzarely stalled or fallen in past decade and that sucks for everyone. I don't mind competition among US, China, Russia and others, if the competition is in
improving things. Great if Chinese kick US and EU arse in deploying clean tech. The only reason you are seeing electric cars proliferating is because western car manufacturers know Chinese will pursue it and leave them behind if they don't finally move their asses.

I wish there was more positive competition than the kind that goes on between democrats and republicans, which should have been extinct with the 20th or earlier centuries.

@GeirT Apple and other companies actually were not involved and did not start the China manufacturing trend by themselves. Those Taiwanese companies did. They were already the dominate component suppliers when they started to explore the Chinese manufacturing possibilities. Apple just went along with the proposal because it turned out to be the most cost effective way for them too.

Do we still need those middlemen now that Chinese infrastructure is well established? Likely so. It easier to deal with Taiwanese (or Hong Kong) companies which more closely adheres to western business practices and ethics and let them to deal with the way Chinese do business. My company, an American company owned by a Japanese corporation, has significant factory presense in China but the Chinese operation is headquartered cross the border in Hong Kong with Hong Kong employees. A lot of things they know how to do Americans and Japanese don't or can't.

That however is not an option for Tesla because they don't use middlemen or distributors. Tesla has no choice but to directly set up the China operation which can be very challenging. They may eventually learn how to do things there but that likely will take a while. That seems to be the way it looks now.

@ carlk
You are of course correct, that Taiwanese have been established i China for a long time and actually were significantly present in textile, even dominant in IT etc. Same goes for Hong Kong even Singapore to a degree. (Singaporeans are considered arrogant so even cross cultural sensitivity to be considered).
My point with my 'rant' was that a Tesla strategy have to involve partners that are culturally proficient, and in my mind it was more related to the quality of their own organisation. The middleman as you point out is likely not an option for Tesla and I believe that is a very good decision.

China is too expensive now. Tesla would have done it, had they began production a decade ago. Now, companies produce locally because it is more convenient to manufacture locally in large markets. Like BMW began production in US years ago, even though many thought Spartanburg made cars would be crap.

Even Apple,... manufacturing in China for global markets is largely inertia. It isn't really notably more expensive to produce in US, especially transport and other factors included in the end cost.

Where people still go wrong today (because of lack of understanding of global economics) is in thinking bringing production "home" etc.. solves anything. It is just political "patriotic" bull. The Chinese who have jobs producing for
US consumers, buy US made goods in the ends. Money circulates and things work.

Noone in US, EU and Japan wanted the jobs Chinese had in past decades. It is only when economies collapse and unemployment grows when people want those jobs and usually the blame game starts. Not to mention in is not hard working people aren't to blame but very few very well dressed and spoken white men are. The ones that look like myself. Lets be fair.

Those hard working Chinese guys allowed US consumers cheap goods without inflation. Now, they are even. Now they want to travel, have cars, apartments, etc also. And Teslas :)

Even if a Chinese company copied Tesla's car to the bone, Chinese would buy the original. Westerners would be the ones who would want to buy a cheaper copy. Chinese made fakes and counterfeits for westerners. Chinese don't touch them. They want originals and some sell their kidneys for the overhyped crap that the iPhone is.

A decade ago, Chinese had no clue what design is. And had no word for free time. Now they win Pritzker prizes for architecture, art prizes, etc.
Next, I want the North Koreans and Iranians to do so, because when they do, it means they are like us and have too much to lose to try and harm us.

If you want N Korea to stop being a threat, we need to give them an economy on a plate, the kind so good, they won't want to sacrifice..

The global collapse taught even the dumbest of politicians that we are all in the same boat. Well, not all. Some still play with ideologies to the point where it can collapse. Lately US politicians got closer to that than Kim Il Jong ever did. Not appreciating it. I would say Elon for president but in such a misaligned political system, he wouldn't be able to do much anyway. Tesla and Space X really are the best of US. It isn't China that is trying to crush Tesla. It is domestic foes. Chinese know value and knowledge when they see it. They are the ones buying 123, Fisker, etc..
They are the ones with record subsidies for electric cars.

In Shanghai you can't even get a registration plate for regular cars anymore. Only for electric...

Elon thinks Germany is the largest foreign market for Tesla. I think it will be China and quite soon.

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