Tesla China

According to a new report from Nikkei, Tesla anticipates very little growth in mainland China in 2016. The news agency reports that during his current trip in Hong Kong, Tesla CEO Elon Musk revealed that the company aims to deliver 5,000 cars this year after falling short on its 2015 delivery goal of 10,000 units in China.

As we recently reported, the company is doing better in the region since the second half of 2015. Tesla delivered 3,025 Model S’s in mainland China throughout the first 9 months of 2015. Though the results are quite disappointing, especially when comparing them to Hong Kong’s, which is a much smaller market, yet Tesla delivered 2,221 Model S’s in the city last year.

Despite its slow growth on the mainland, Tesla significantly invested in China. The automaker has 15 stores across China’s largest cities and plans to open a new one in Macau later this year. It has more than 340 Superchargers and 1,600 destination chargers across the mainland and Musk expects to keep expanding:

“We expect to expand quite substantially. Our biggest area of expansion in the next year or two will be in Asia.”

Musk says that the high import duty is the main obstacle to Tesla’s growth in the country:

“We are still doing reasonably well in mainland China, but we do face quite [a] high import duty, and we do not yet have access to local incentives. The obstacle for our cars in mainland China is much greater than it would be, actually, anywhere in the world.”

In order to avoid the import tax, Tesla plans to add manufacturing capacity in China and start producing vehicles for local sales. Musk said that the company aims to find a location and a local partner by the middle of the year.

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