Asks a few questions, doesn't take much of a stand. Let me help...
Most Chinese can not even get close to affording a Tesla, of luxury buyers some may, if they like it, than more will. Likely Telsa is looking at taking customers from BMW and Audi in China. If they can sell more than 2,000 in Mainland China in 2015, I will think it is a good achievement. And if the the real estate bubble pops before then - well it they can sell 200 that will be amazing...
Looking forward to 2015, I think Norway and Nederlands will be far more important to Tesla's future than Mainland China. People in those countries really seem to appreciate what Tesla has to offer. By 2015 people will be seeing other people driving Teslas around and happy with their purchase, than I think 10 or even 15% market share is possible there, with maybe 2% market share in other major markets like US and Germany... That amounts to a lot of cars! The NUMMI plant will be at full capacity sooner than we think
Chinese will buy one, take it apart and clone it with cheap materials.
Hehe yeah and put a BYD badge on the cheap clone... Think anyone outside of China will buy one?
"Think anyone outside of China will buy one?" Sure! Think India, Middle East, Russia, other Asian countries. Remember when China wanted to place 1 single order for a 747 from Boeing and Boeing said, "Yeah...NO!"
It does make sense to focus on Scandinavia, Holland, Switzerland, etc instead of China. Norway offers serious incentives like no import tax, free charging, etc versus heavily taxed ICE autos, $9-10/USG. Nominal per capita income of Norway is nearly $100k! These countries already have charging infrastructure. Just the opposite in China with low per capita income and a large country in area with few electrical chargers.
Same in the US... got to focus in states like CA, Northwest, North East, etc where the population is dense and the highway corridors. Tesla has very limited resources.
1% of 1% of consumers in China is still a helluva lot of buyers.
Brian H - +1.
Look, I appreciate a higher market penetration in passionate countries like Norway and the Netherlands, surely critical to Tesla's success.
And yes, friends who have been to China the last several years, and 60 Minutes, report of highrise ghost towns. So there will probably be a real estate bubble.
But too Brian's math, 1% of 1.2 billion is 12 million, and 1% of that is 120,000. Multiply that by $100K and you get 12 billion in gross revenues.
Yes, a Beijing showroom is a decent thought. All those empty highrises have a lot of available power...
The author clearly hasn't driven a MS so far and I doubt he has been ever to China. The most expensive assembly of foreign cars I have ever seen (and I live in the bay area with no shortage of expensive cars) is in front of any decent hotel in China over the weekends... Maseraties, Aston Martin, Lamborginies, etc,... you name it. I am sure there is ample of opportunity to sell thousands of cars. Electrical infrastructure is not a problem because they have staff to take care of it so the car is ready for the weekend.
I just think that the price of setting up a China store, service, plus maintenance for a year will be in excess of $1M-2M. For that kind of money, Tesla can set-up 100-200 charging stations each with 10 hook ups at 50-100 Amp/240V. All over the US.
Tesla has limited resources, and it needs to focus them at the most decisive geographic areas like West Coast, East Coast, Gulf Coast, the highway corridors. Then the Europe. It is much easier to do business here in the US, shorter supply and communication lines. It is this kind of focus that allows a company like Tesla to reach a critical mass with density of chargers, service, etc and leads to S-Curve growth.
That is what MacDonald, Starbucks, etc did before they went global.
100-200 SC stations will cost 30-60 $million, not 1. Not a relevant comparison. Musk is on a faster timeline than McDonald's.
A China store makes sense to me, here are some reasons why: -To not alienate China. -For Tesla to start getting exposure there through word of mouth. -To test the waters, it's a toe in the ocean to see what happens. -Maybe China or even Asia is not quite ready for Tesla, we'll see, but that is one huge market as Brian said, so it cannot be ignored. -Most people buying a MS in China will not worry about supercharger infrastructure because they can just use one of their several other cars for a trip, or fly as usual... perhaps similar to what the first Roadsters meant in America. -China has the most millionaires in the world, if I am not mistaken, and most seem to have particular tastes and interests from what I gather. -One store in China doesn't commit Tesla to building more in Asia in the near future, so it can still focus on other places until China--and the Tesla GenIII Bluestar--are ready.
I hope Tesla can succeed in China, but the main culprit for China's horrendous environmental problems will be the very source of power for Tesla vehicles sold in that country - coal-fired power plants.
Electric vehicles are a huge step in the right direction towards sustainable transportation, but renewable energy sources such as wind and solar are the key to making the the EV a true game-changer. China's coal-fired power plants are just trading one fossil fuel (oil) for another, more environmentally toxic fossil fuel (coal).
Dispersed, non-dispatchable power sources subject to loss and requiring large allocations of real estate are the very opposite and enemy of progress. Windmills had their day, but it is centuries gone.
China is now #1 in wind power, has built out a lot of clean hydro (Three Gorges Dam) and is deploying a lot of PV solar (mostly small scale in southern provinces like Hainan where it makes sense) so as China slowly starts to clean up its grid BEV/PHEVs will be good for China as well as the world at large but Tesla prices will mean small volume in sales, (the rich men's toys catagory) and I am not holding my breath for Gen III, I just think about 2015 when Model S will be available worldwide and Model X will be rolling off the line.
If they sell 200 - 2,000 I think they will have done well and hopefully at least be on the path to break even on their Beijing Store (the HK store can service Guangdong and southern China). It would be foolhardy to open more stores there unless sales were really way beyond expectations, and only if they remained steady past 2015.
Agreed with Bubba that NE (plus Toronto), West coast, FL and possibly TX should be the main focus for Tesla in North America and the EV friendly parts of Europe like CH, Norge, NL... Those areas have been producing sales and have the money and have the consumer interest to be profit centres and are worthy of SC investment.
With more friendly government policy, more of Europe (UK, France and Germany), More of Canada, Aus/NZ and Japan would be fertile ground, but their backward (or protective in the case of France Japan and Germany) policy puts a damper on things.
FL; you could change all of China's ICE to BEV at a stroke and it would have almost no effect on their air. Goods mfr and transport and coal power plants are doing almost all of it. It is very different from the US.
As for what is putting a "damper on things", it's the slow dawning of awareness that renewables economics is suicidally stupid. Watch the UK for a while; it's almost bought the farm unless it pulls fracking out of the bag at the last minute, which it is finally coming to realize.
ICE cars are small part of the pollution problem in China, agreed, but BEVs would help and allow them to reduce oil imports. But I do not see any great number of Teslas being sold there.
The offshore wind thrust in UK is a different animal than regular wind, not cost effective at all. Yes they need fracking to bolster sagging North Sea production. The UK seems to have suicidal tendencies in general when it comes to governance and strategic thinking... In 60 years they go from the the largest empire the world has ever seen to a pathetic second rate vassal state to the EU. Even the argentines are looking to grab the Falklands again as they smell blood in the water from a once proud nation that can not even control its own borders and allow islamic radicals and third world thugs and looters to take over its cities... I love the UK and its culture but it is plain sad to see the state the place is in today...
Wind has been cost effective for a while, according to the industry at least, but I agree that producing any power of any source is challenging, especially when the power is not concentrated and on-demand, unlike fossil fuels. Basically, fossil fuels have turned us into spoiled brats who are not used to working to harvest their energy. There may be lots of coal left, but even pollution aside, we know by definition that non-renewables cannot last for ever. I see it as another technological challenge that awaits a great mind to come along and change everything. Elon, I'm still waiting for that clone of yours to come and help me with creating ultra-cheap wind power.
And I agree, one Tesla store in China is enough for now and the next few years. That store will be useful, though, as an indicator of rising demand for Tesla vehicles in that country, which is probably more reliable and cheaper than doing surveys and studies if the store pays for itself.
I imagine there will come a time when Tesla will be selling some type of transport that appeals to China a whole lot, not sure if that will be more in the form of a compact EV or some form of public transit, or even EV motorcycles. Either way, having a worldwide presence, even if thin, is a smart move in preparation.
"spoiled brats" is good. External energy that substitutes for muscle power is the whole point. Your entire way-of-life arises from availability of concentrated power. Pretending that such sourcing can be replaced with inefficient PC forms is foolish, and very dangerous. Already many millions have been driven below the starvation-unto-death line by the doublings of grain staple prices over the last decade or so, caused by the misappropriation of agricultural resources for Fuel instead of Food -- what an FAO official termed a 'Crime Against Humanity' (the UN's worst offense, worse than war crimes or slave trafficking).
The pushing of renewables is a crime against civilization, which its pushers despise and want to unravel. (Just listen to John Ehrlich, newly elevated to the Royal Society. Mass depopulation is just one of his dreams.)
We don't have to bomb people for electricity. The only fight over electricity were the so called, "current wars", between Edison and Tesla (Westinghouse) and the only entities that died were a few stray cats and dogs, an unruly elephant, and a death-row inmate. Tragic, nonetheless but still on a tiny scale compared to every war from WWII until today.
Fusion, hydrogen, & cost competitive renewables by the end of the century. Reduce all hydrocarbons to hydrogen to keep oil & coal jobs. Natural Gas & Safer Planned Nuclear as transition fuels to create jobs & get our economy going again.
As much wind- and solar-generated electricity as China is aiming to produce, they can't switch to renewables fast enough. As someone who had childhood asthma, I almost needed a respirator just looking at these pictures:
I certainly hope that China continues to clean up its energy grid, as this will not only help the viability of EVs (such as Tesla) as a sustainable form of transportation, but more importantly, the health of millions of Chinese citizens?
As much wind- and solar-generated electricity as China is aiming to produce, they can't switch to renewables fast enough. I almost needed a respirator just looking at these pictures:
Cleaning up air pollution has demonstrably nothing whatever to do with renewables. It has to do with emission controls at source.
Brian, if I understand your point, as the world runs out of fossil fuels, humanity will inevitably head back towards a new stone age because we have no energy to power our modern lifestyles? Since the majority of people are not fit for that lifestyle, the majority will die. I used to wonder if that could happen if there was a sudden and way more severe than ever experienced energy shock, at least in some parts of the world. I now have a little more hope in humanity's potential to find solutions. And don't forget that a large portion of energy use is waste, just because we can afford to waste so much. Maybe a financially depressed and energy poor place like Greece today is a good example of what would happen: people heat their house much less or not at all in winter because the gas supply was cut, and life is affected in dozens of other ways, but it goes on.
I agree that biofuels are ridiculous. By that I mean plants grown specifically to be converted to fuel, as opposed to using oil frying grease as biodiesel or discarded by-product like sawdust for fuel. Pretty soon meat will be grown in lab farms underground or in towers, using a process that is much more energy efficient (might involve eating more fish and less hot-blooded animals, who knows), and we will look back to today and wonder how we could be so foolish to trade ten pounds of grain for one of meat and pollute waterways in the process. I'm not against eating meat, I'm just saying there is a lot of room for improvement there because the process is so inefficient. Asian carp sounds like the most efficient meat source of all, and it so happens to be invading North America right now. If I lived near waterways this fish has reached, I'd be fishing right now.
As for your quick condemnation of renewables, Brian, I find your reasoning on the subject either lacking or overly simplistic. Do you really see no hope whatsoever for any form of renewables?
@TeslaRocks "Brian, if I understand your point, as the world runs out of fossil fuels, humanity will inevitably head back towards a new stone age because we have no energy to power our modern lifestyles? "
Not really, though some kind of fantasy fuedal lifestyle seems to be the logical outcome of hard-core green scenarios. "Running out" is not the issue, but demonizing and abandoning is. Economics and the will to survive will prevent wholesale idiocy, but in the meantime billions suffer, and millions die as the poorer countries take the hit. E.g., power generation projects in Africa are unfunded because they're not "green" enough, electricity isn't made available, and the deadly reliance on smoky fires or kerosene lighting indoors continues. In the UK, pensioners must choose between heat and food as power and fuel prices spike--as a planned result of moving to "80 % renewables" in a few years. Etc.
Brian, If you are referring to biofuels, although it may masquarade as green policy, it is clearly not, it is a policy to support farmers and other business interests. Seeming environmentally conscious has been a great sell politically and for anyone with a public image, really, so don't be surprised if a lot of businesses and policies jump on to make a quick buck for them or their friends and care little about the actual issue.
It's the first time I hear of projects in Africa not being funded being because they are not "green" enough. Last time I checked, instability and war were the main deterrents to economical development in that region. Plus China doesn't seem to mind, they are a developing a lot of projects in places like Sudan and Angola. Those "green" concerns haven't stopped the peasants in Madagascar from chopping down a large part of the rainforest. Similar story in Brazil and part of Asia. Doesn't mean they'll live better when there'll be no more forest for them to exploit.
I don't deny that there are a lot of stupid or perverse effects to some "green" policies, like carbon credits motivating at least one company in China to pollute like never before (article I read years ago). I agree the approach isn't always effective and sometimes fails pretty severely, which is expected when trial and error is involved. That doesn't mean it is wrong to try something if the intent is noble.
However, you seem to have the approach that not only is the therapy the wrong one, but you don't acknowledge a need in the first place. So which one is it you don't agree with, the medication or the diagnosis?
Eventually the world will run out of fossil fuels (meaning it will become increasingly costly to harvest what's left while needs will be at all-time highs) and humanity will be faced with an unavoidable choice: adapt or die (by "die" I mean mostly the modern lifestyle, because a few will survive). Except it will be too short noticed to refine the technology and switch to renewables without inflicting a serious shock to the same kind of people you describe are suffering now. The alternative is to start developing and deploying renewable energy equipment sooner in hope of reducing the shock, although in the meantime that technology may look unappealing and hopeless in comparison to the convenience and abundance of fossil fuels. There are always trade-offs in these sort of things. What is needed is one or many breakthroughs, but those can happen only if we push ahead.
Well, let me see... I can't say for all Chinese but since I bought one and I am a Chinese (Chinese/Taiwanese to be exact), my answer is "yes, definitely!". On top of that, I also "sold" several Tesla MS to my friends.
It really isn't just about the price since there is no lack of rich people or fancy cars in China, H.K., Taiwan, etc. After all, it's the quality of air you breathing in if anyone cared.
Just my 2 cents.
TRocks; support for some generating plants was explicitly withheld at the instigation of a senior British official in a UN agency, for that reason. I'll dig around for the link, and post it if I locate it. But there has been much pressure to use "natural" energy sources at many times the cost per kW of conventional plant -- a luxury the third world is neither willing nor able to support.
As for eventually running out of fossil fuels, that argument gets weaker by the day. In any case, the illusion of "saving them" for future generations is both arrogant and foolish. The Stone Age didn't end because people ran out of stones, nor has any civilization collapsed for lack of resources since the Romans ran short of tin.
China to become world’s biggest luxury car market, surpassing the U.S.:
X Deutschland Site Besuchen