Tesla China

Tesla CEO Elon Musk has been on an international trip over the past week. First in Australia earlier this week and in Beijing yesterday.

While in China, Musk met with Chinese Vice Premier Wang Yang. The nature of the discussion wasn’t disclosed, but it comes as Tesla is looking for 2 or 3 more locations to build Gigafactories for both batteries and cars.
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Tesla had a rough start when it started selling its cars in China in 2014. Several delays and bad perception on charging options led to poor sales that persisted through 2015.

But in its latest SEC filing, Tesla confirmed that things changed in 2016, which was a breakout year for the automaker in China. They more than tripled sales to over $1 billion in revenue last year.
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While Tesla only started delivering the Model X in China in June of last year, the all-electric SUV is reportedly already popular in the country. It was even going for a 40% premium ($240k US) on the Chinese gray market and it helped Tesla increase its deliveries in the country to reportedly around 10,000 units in total (S and X).

Some of the first owners gathered in order to set a new Guinness World Record.
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China has strong protectionism laws in place that require any automaker wanting to establish production capacity in the country to partner and share its technology with a local manufacturer – something several automakers have decided to do in order to tap into what is now the largest auto market in the world.

But in an attempt to accelerate electric vehicle production in the country and fight its air pollution problem, China is now proposing to relax those laws for what they call “new energy vehicles,” a.k.a. electric vehicles, in order to attract more foreign investments. The new rules are expected to open the door to Tesla and other automakers who recently expressed desires to establish manufacturing capacity in China to produce electric vehicles.
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China is serious about electric vehicles, which it sees as part of the solution for its air pollution problem. In order to facilitate the adoption, the country developed its own charging standard and it is investing heavily in deploying state-owned EV charging infrastructure.

Tesla has been working with the government to promote the recently revealed standard and now it plans to introduce a new adapter for its cars to have access to the new charging stations, which it hopes will increase sales in the country.
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Tesla China likes to organize some pretty impressive road trips with its vehicle owners. In 2014, they traveled the Silk Road in Tesla Model S sedans right after the market introduction in China, which was a time of rapid expansion for the country’s EV charging infrastructure.

Now that Tesla introduced the Model X in China, the automaker announced another achievement: reaching the world’s highest plateau with electric vehicles.
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Tesla already started deliveries for the Model X in China back in June, and prior to the market introduction of the all-electric SUV, the vehicle was already proven to be popular in the country with reportedly over 3,000 reservations in mainland China.

Now we learn that some customers are not willing to wait and prefer to buy the vehicle directly on the ‘gray market’, even though it comes with serious setbacks and a decent premium.
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Yesterday, Tesla inaugurated its 100th Supercharger in China located at its ‘Tesla experience center’ in the business district in Beijing, and for the occasion, the automaker announced the official launch of  ‘Tesla Public Charging Partner Program’ in the country.

Under the program, Tesla is inviting hotel groups, commercial real estate companies, industrial parks, office buildings, banks, resorts, and other businesses across the country to participate in Tesla’s Supercharger and Destination Charger networks.
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Earlier this month, Bloomberg came out with a report claiming that signed a “non-binding memorandum of understanding” with Jinqiao Group, a Shanghai government-owned company, to invest in a $9 billion electric vehicle factory in the region. At the time, Tesla didn’t comment on the report, but now CEO Elon Musk denies that a deal was signed:

@mashable We haven't signed anything for a factory in China

— Elon Musk (@elonmusk) June 27, 2016

Earlier this year, Musk confirmed that the automaker plans on securing a location and a local partner for a manufacturing facility in China by the middle of the 2016, but now we learn that there’s a possibility that Tesla will not have to create a partnership as the government is exploring the a lift of the cap on joint-ventures for automakers.
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Just a week ago, we reported that the first shipment of Model X’s has cleared customs and that the company’s stores and service centers, also sometimes referred to as “experience centers” in China, are receiving the all-electric SUV.

Now we learn that Tesla hosted a special delivery event for the first 6 Model X owners in China.
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There’s no doubt that Tesla likes big factories. Its Fremont Factory is one of the biggest buildings on earth with 5.3 million square feet of manufacturing and office space – pictured above. The Gigafactory is set to be the biggest building on earth by footprint with 13 million square feet of space. The automaker also operates several other smaller but still fairly big facilities, like its final assembly line in Tilburg, Netherlands, which covers 840,000 square feet.

Now the company is about to invest in a factory in China. While the plans have yet to be unveiled, earlier this year, Tesla CEO Elon Musk confirmed that the automaker plans on securing a location and a local partner for a manufacturing facility in China by the middle of the 2016, and it looks like it will be huge.

We learn that Shanghai could now be the front-runner as Tesla reportedly signed a “non-binding memorandum of understanding” to invest in a $9 billion electric vehicle factory in the region.
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Today, Tesla launches new ‘zero down payment’ and ‘zero interest rate’ financing programs in China as the company is trying to expand in this increasingly important market. Earlier this year, we reported on Tesla testing a similar program for a limited time with the China Merchants Bank, but now the new programs have been tweaked and will run for the rest of the year in partnership with Fosun, a Chinese financial service company.
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Reports are coming out that Tesla is starting Model X deliveries in China ahead of schedule. The first shipment of Model X’s reportedly cleared customs and delivery centers now have the electric SUV. They can start delivering to early reservation holders who have been waiting for years in some cases.
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As we discussed in the past, the Tesla Model X is expected to be popular in China – in part due to its new air filtration system (though it’s now also available with the Model S). Now Tesla is about to start deliveries in the country and it will establish ‘operational headquarters’ in Beijing to manage its expansion in the country.
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Tesla attributed its early difficulties in penetrating the Chinese car market in part to misconceptions about charging electric vehicles in the country. Those misconceptions are most often due to little knowledge of electric vehicles in general. The situation is changing fast as EVs are becoming increasingly common in mainland China thanks to several government incentives and the fast growing electric scooter market.

Though it’s never moving fast enough for Tesla. The automaker is trying to address the issue in a very simple yet likely to be fairly effective way in the long run: educating children about electric vehicle technology.
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Tesla doesn’t buy advertising space but it doesn’t shy away from creating promotional content. Its latest effort is a commercial for the Chinese market featuring some beautiful scenes from a Tesla road trip.
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China has developed a new charging standard in order to more efficiently deploy a charging infrastructure capable of supporting the up to 5 million electric vehicles it hopes to get on the roads by 2020. Tesla is now fully on board and announced today the launch of the ‘Tesla Charging Partner Program’ in China to promote the national EV charging standard.
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Earlier this month, Tesla confirmed that it is currently working on increasing its production plans to minimize the wait for the Model 3 following the storm of reservations it received for the $35,000 all-electric sedan – approaching 400,000 cars as of the latest update. The vehicles are set to be manufactured at Tesla’s main factory in Fremont, California.

While Tesla plans to manufacture about 90,000 vehicles in 2016, the company always refers to the Fremont plant’s total capacity to be around 500,000 cars per year once optimized, which is what Toyota and GM were producing when they owned the factory, and it also plans to add more manufacturing capacity in other regions.
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Earlier this year, Tesla CEO Elon Musk confirmed that the automaker plans on securing a location and a local partner for a manufacturing facility in China by the middle of the 2016. A foreign company needs a local partner in order to establish a manufacturing capacity in China.

Now we learn through a recent report from Chinese media that the California-based automaker is reportedly considering a factory location in Suzhou near Shanghai (see map above).

According to the report, the Suzhou government held a meeting on March 13 to discuss a project related to Tesla and executives from the company visited the region during the following week.
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