Bottom line: Tesla and other EV makers are likely to face an uphill road in China for the next year, but prospects could start to improve in mid 2015 as new initiatives gain momentum.
Tesla launches trade-in program
Reports on a new trade-in promotion from Tesla (Nasdaq: TSLA) are adding fuel to talk earlier this month that the high-flying electric vehicle (EV) maker isn’t doing as well as hoped in China, where sales have gotten off to a slow start. This kind of a sluggish start isn’t too unexpected, since EVs are rare in China and face many obstacles despite a strong push by Beijing to boost the sector. Tesla should be commended for its numerous efforts to promote EV development in China through a wide range of initiatives, but is also largely to blame for the building disappointment after it built up huge expectations for itself in the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 20-22. To view a full article or story, click on the link next to the headline.
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China’s Fosun (HKEx: 656) Raises Offer For Club Med (Paris: CU) (English article)
Waldorf Buyer Anbang Invests In Property, Banking Stakes (English article)
China Mobile (HKEx: 941) Targets 250 Mln 4G Users By End Of 2015 (Chinese article)
BYD (HKEx: 1211) Stock Rebounds, Confirms Buffett Hasn’t Sold Down Stake (Chinese article)
Ctrip (Nasdaq: CTRP) Launches Open Platform For Travel Agents (Chinese article)
Bottom line: Bureaucracy at the homeowner level is providing a major obstacle to China’s ambitious new energy vehicle build-up plan, with new government directives unlikely to fix the problem.
Building bureaucracy blocks EV charge
A new report is showing just why new energy vehicles are failing to gain any traction among Chinese consumers, despite huge government efforts to promote the technology. The main culprit in this case is the country’s huge bureaucracy, which affects everything from the largest government programs all the way down to something as simple as installing a vehicle charger in an apartment building.
In most western cities, the installation of an electric vehicle (EV) charger at a person’s home would be a simple matter, involving a visit from a specialist to hook up the proper equipment. Apartments could be slightly more complex though still manageable, since they would involve modifications at collectively owned buildings. But in China, where most people live in apartments, the bureaucracy of installing chargers in such buildings rises to a whole new level, creating a major obstacle that’s unlikely to go away anytime soon. Read Full Post…
Beijing is turning to an old trick in its bid to boost new energy vehicles, with word of a major new program requiring local governments to buy huge volumes of electric taxis and buses to jump-start the struggling sector. I have to slightly commend China’s government leaders for their determination to boost clean energy vehicles with this kind of program that’s likely to produce a major jump in new sales. But at the same time this kind of program also looks quite ominous, as it will result in a flood of immature technology coming onto China’s roads as local governments rush to meet centrally-set quotas without regard for the commercial viability of what they’re buying. That could result in huge wasted government spending that could ultimately hinder the sector’s development due to lack of pressure to innovate. Read Full Post…
Despite disappointing progress in China’s plan to put hundreds of thousands of new energy vehicles on its roads by next year, American electric car maker Tesla (Nasdaq: TSLA) has made remarkable progress despite its late arrival to the market. The company has won its strong initial results though a smart combination of savvy marketing and initiatives to encourage building of necessary infrastructure to support its buyers.
The latest of those initiatives saw Tesla last week announce a partnership with Unicom (HKEx: 762; NYSE: CHU), China’s second largest mobile carrier, to install charging stations at hundreds of Unicom outlets nationwide. (English article) As a result of these and other efforts, Tesla has been the lone player so far to succeed in China’s broader consumer market, an area that will be critical to achieving Beijing’s goals. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 23-25. To view a full article or story, click on the link next to the headline.
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Regulator Says Qualcomm (Nasdaq: QCOM) Seeks To End Anti-Trust Probe (English article)
US Game Designer Ouya Scores Xiaomi Partnership To Take Games To China (English article)
Electric vehicle maker BYD (HKEx: 1211; Shenzhen: 002594) has been zipping in and out of the headlines this past week, including its latest announcement that it will open a manufacturing plant in Brazil to service the BRICS country and the broader Latin American market. The company’s EV business, a major factor that attracted billionaire investor Warren Buffett as a major backer, also got good news from Beijing this week with word of a major government drive to boost new energy vehicle buying.
Despite those positive moves, the company still has yet to received its first major overseas order, though it has certainly set up many pilot programs. Such programs make good headlines, even though they result in very limited actual business. And those programs receive far less attention when they end in failure, which is what recently happened to a high-profile trial in a city near Los Angeles. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 16. To view a full article or story, click on the link next to the headline.
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Alibaba Said Likely To Sell More IPO Stock As Yahoo (Nasdaq: YHOO) Retreats (English article)
China Construction Bank (HKEx: 939) Registers New Zealand Subsidiary (English article)
China Awards 5th Batch Of E-Payment Licenses, Including First For Foreign Firm (Chinese article)
BYD (HKEx: 1211) Announces First Factory In Brazil (Businesswire)
Ctrip (Nasdaq: CTRP) Criticized For High-Fee Refund Policy (Chinese article)
A couple of headlines are spotlighting the ongoing woes of 2 groups in China’s auto sector, with domestic brands and new energy vehicle makers both showing signs of difficulty. In the former category, reports that former domestic high-flyer Chery is closing one of its biggest Beijing dealerships spotlight the broader woes of domestic car brands that are losing share to better-run foreign rivals. In the latter category, another media report is showing that new energy vehicle sales were largely insignificant in the first 4 months of the year, even though they did notch major gains over 2013. Read Full Post…
German luxury automaker BMW (Frankfurt: BMW) is in 2 sets of China headlines today, coming under a media attack for its high prices as it separately announced it will bring its electric vehicles (EVs) to the market. If I were a conspiracy theorist, I might try to link these 2 pieces of news and say that BMW knew the media attack was coming, and made its EV announcement to try and deflect the negative publicity. But I really doubt these 2 pieces of news are related. Instead the new attack from leading broadcaster CCTV reflects one of the biggest and more unique dangers that major multinationals like BMW face in China. The EV announcement represents the kinds of counteroffensives such companies must launch to maintain a positive image. Read Full Post…
New York is firmly establishing a reputation as the preferred listing venue for China Internet IPOs, while Hong Kong is developing a taste for auto-related listings. That’s my quick assessment following reports that online video sharing site Xunlei has just joined a long queue of Chinese Internet firms filing to list in New York. At nearly the same time, car rental company China Auto Rental has filed to list in Hong Kong, reversing course from a previous plan to offer shares in New York. Read Full Post…
