Bottom line: Tesla’s announcement that its China plant is three years away puts a clear and realistic timeline on its intentions, which include strong growth in the market banking on supportive policies by Beijing.
Tesla gets realistic about China car production
Anyone who was hoping that electric car superstar Tesla (Nasdaq: TSLA) would start cranking out its products in China anytime soon will have to think again. Founder and celebrity CEO Elon Musk has poured cold water on all the speculation about his company imminently building a China manufacturing base by saying local production is at least 3 years off. That’s just a single data point, but it’s quite a significant one considering all the talk that’s been swirling around these days.
That talk dates back a couple of years, when reports first emerged that Tesla was interested in such a move. One of the stumbling blocks all along has been the ownership issue, since China now limits foreign ownership of any car-making joint venture to 50 percent. But that looks set to change, which had fueled speculation that Tesla would step on the gas pedal once it got the green light, pardon all the car metaphors. Read Full Post…
Bottom line: Tesla is likely to announce a new $9 billion electric car joint venture in Shanghai within the next two months, which could begin production as the industry starts to gain traction in the next 1-2 years.
Tesla on cusp of electric car JV
Almost a year to the day after media reported an imminent deal that would see electric car maker Tesla (Nasdaq: TSLA) set up a plant in Shanghai, new reports are emerging saying the long delayed deal will finally be announced. Anyone sensing a bit of “boy who cried wolf” with the latest reports is probably justified in feeling slightly skeptical. But I would quickly add this time perhaps we could finally see an announcement. It may not be as imminent as the reports are indicating, but perhaps within the next month or two.
Anyhow who feels compelled can go back and look at the reports a year ago, at which time I also predicted an announcement could be coming in the next month or two. (previous post) I tend to probably believe such reports a bit too much, mostly because China is a famously leaky place for such news. But that leakiness means that talks for deals often get out when they’re still in the relatively early stages, whereas in the west most such leaks don’t occur until the deal is nearly done. Read Full Post…
Bottom line: Tesla will announce a joint venture production facility in Shanghai within the next 1-2 months, and could see its China sales pick up sharply after its more affordable Model 3 reaches the market next year.
Telsa eyeing China home in Shanghai?
Just a week after Disney (NYSE: DIS) launched its newest theme park in Shanghai, media are saying that new energy car superstar Tesla (Nasdaq: TSLA) is also eyeing China’s commercial capital as the location for a new production base costing up to $9 billion. We should note from the start that the potential partner mentioned in the reports, the Shanghai government-owned Jinqiao Group, has denied the signing of a memorandum of understanding (MOU) for such a deal. But in this case I trust the source of the story, Bloomberg, more than the Chinese officials who have a track record of denying reports that later turn out to be true. Read Full Post…
Bottom line: Tesla’s newly announced modest China sales and announcement of a plan for potential local production reflect the uphill road it faces in the Chinese market, which is unlikely to get much easier in the next 2 years.
Tesla still searching for China sales charge
China is fast becoming the land of promising upstart companies that failed to reach their potential, with word that former new energy superstar Tesla (Nasdaq: TSLA) has posted very ho-hum car sales in a market where it once held out big hopes. The rare China sales figures come as Tesla discussed possible plans to localize some of its manufacturing in the world’s largest auto market, a move that charismatic founder Elon Musk says could cut the cost of cars by up to a third.
The latest Tesla news came from a local media event in China that didn’t go off too smoothly, and apparently wasn’t meant to be reported by foreign media. The event’s lower-key nature and other glitches were unusual for Tesla, which was traditionally a master at slickly orchestrated events and appearances by Musk that gave the company hugely positive publicity when it first drove into China last year. Read Full Post…
Bottom line: A negative tale from Chongqing spotlights the challenges Tesla faces in China due to lack of infrastructure, while a big taxi fleet order in Wuhan offers a possible new route for the company to jump-start its Chinese sales.
Tesla taxis hit road in Wuhan
Sputtering new energy car maker Tesla (Nasdaq: TSLA) is in a couple of new China headlines, scoring a big order in the central city of Wuhan and an embarrassing bit of negative publicity in the southwest city of Chongqing. Watchers of the company and its difficult road into China might recall it was exactly a year ago that Tesla’s charismatic founder Elon Musk made a high profile visit to the country to hand over the keys for its first official sale to a local customer.
That event happened on the sidelines of China’s largest annual auto show, which rotates between Beijing and Shanghai and has become a major global event due to the country’s status as the world’s largest auto market. But in a testimony to the challenges Tesla has faced since that hype-filled day, Musk failed to appear at any public events during this year’s show that has been happening all week in Shanghai. Read Full Post…
Bottom line: The failure of 3 major tech leaders to discuss issues confronting their companies at a major forum in China reflect a Chinese preference to avoid thorny issues in public and instead focus on more trivial matters.
Bill Gates, Elon Musk avoid tricky issues at China forum
It’s not often that 2 of the hottest US tech personalities can share the stage with one of China’s biggest Internet names and fail to say anything newsworthy. But that’s exactly what has happened in the southern Chinese city of Bo’ao, where Microsoft (Nasdaq; MSFT) founder Bill Gates and Elon Musk, CEO of electric car sensation Tesla (Nasdaq: TSLA), failed to say much of interest as they shared the stage in a dialogue hosted by Robin Li, founder of leading Chinese search engine Baidu (Nasdaq: BIDU).
The lack of insight is even more notable because both Microsoft and Tesla have faced big challenges in China lately, as the former comes under scrutiny for tax evasion and monopolistic practices, and the latter has fallen far short of its ambitious sales targets. But then again, Robin Li isn’t a reporter, and embarrassing his 2 high-profile guests about their recent woes probably wasn’t one of his big priorities as the at 3 men met at the annual Bo’ao Forum in southern Hainan province. Read Full Post…
Bottom line: Tesla’s China reboot appears to be complete, paving the way for it to gain some traction in the market by year end if it can effectively target the nation’s wealthy, image-conscious trend setters.
Tesla finishes China reboot
Nearly a year after driving into China on a wave of fanfare and big hopes, electric vehicle (EV) superstar Tesla (Nasdaq: TSLA) is pressing the reset button on a market that has huge potential but also some major obstacles. This particular reset has been in the works for the last few months, but appears to be near completion with indications that the company has discarded its previous short-term aggressive sales targets for the market.
The reboot to Tesla’s China business is discussed in a series of interviews by Zhao Kuiming, its head of China sales, who was on a PR offensive following the recent overhaul. (Chinese article) It’s unclear from the reports if Zhao is new to Tesla, but he appears to be the company’s new public face after previous China President Veronica Wu resigned in December after just 9 months on the job. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 28-30. To view a full article or story, click on the link next to the headline.
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HP (NYSE: HPQ) To Sell 51 Pct Of H3C Unit To Tsinghua Unigroup, Seeks $5 Bln (Chinese article)
Geely (HKEx: 175) Invests 250 Mln Pounds On British New Energy Taxi Plant (Chinese article)
Gome (HKEx: 493) To Open 100,000 Microstores On WeChat (English article)
China Construction Bank (HKEx: 939) Announces Annual 2014 Results (HKEx announcement)
Telsa (Nasdaq: TSLA) To Localize Production In China In 3 Years: Elon Musk (English article)
Bottom line: Tesla’s weak China performance owes mostly to its lackluster marketing to wealthy, status-conscious Chinese car fanatics, but its situation could quickly improve if it finds a new marketing-savvy country head.
Tesla looks for China jump-start
After roaring into China last year on a wave of hugely positive publicity, electric car superstar Tesla (Nasdaq: TSLA) has rapidly lost momentum and now appears on the cusp of a major overhaul in a bid to jump-start its prospects. This kind of development isn’t hard to understand, as Tesla’s charismatic CEO Elon Musk set the bar incredibly high when he sold his company’s first electric vehicle (EV) in China last April.
One of Musk’s and Tesla’s obstacles has been Chinese consumer reluctance to buy EVs, despite Beijing’s strong desire to promote the clean technology. But Tesla’s target market was never really the mainstream consumer anyhow, and instead Musk was pursuing wealthy, status-conscious people who like to be first adopters of trendy new technologies. In that regard, Tesla’s marketing efforts have also sputtered despite Musk’s strong launch for his brand in China last year. (previous post) 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…
After zooming into China with a slick publicity campaign earlier this year, electric car superstar Tesla (Nasdaq: TSLA) has run into a major new roadblock in one of its most promising markets over a trademark dispute. Tesla thought it had settled a matter that jumped into the headlines last summer as it was preparing to formally move into China. But apparently the trademark squatter who purchased the Tesla names in English and Chinese wasn’t satisfied, and has formally sued the company. Based on past cases, this one could be costly for Tesla, forcing it to pay tens or even hundreds of millions of dollars if it wants to reclaim its name in China. Read Full Post…
