Tesla Sells First Car in China. Preparing it’s First “Ship”ment

Monday, November 11, 2013 1:54
Posted in category Going to Market
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There are few things that investors like seeing more than an announcement that a firm plans to enter China. Especially when there are customers willing to spend 410,000USD to be the first owner!

So, big news is that Tesla has just opened their first store in China, have sold their first car, and on their recent analyst call the indications are that this is just the start.  As reported in the article 3 Crucial Elon Musk Comments From the Call

On the earnings call Musk said deliveries in China would start in the first quarter of fiscal 2014. The company has already passed all of the homologation requirements in China and launched a soft opening with its Beijing store. Musk went on to say that Tesla expects to put its first cars on a boat to China as soon as January.

Where this will get interesting for me is that in terms of position, Tesla has an opportunity to be THE luxury car in China to have, and that could mean great things for a firm that is already maxing out its capacity.

A few things that I look forward to seeing from Tesla are:

1) BMW has just launched its i3 and i8 in China, which could prove to be an interesting match against Tesla.  Both are luxury, but BMW has two advantages that I see: (1) they are a known brand and (2) while both are “limited” range vehicles, part of the BMW service will be to provide a “traditional” car to iSeries owners should they wish to go on a long drive.

2) Part of what is driving Tesla’s market in the US, and what will help increase sales going forward, is the charging infrastructure that they are building across the US.  IF Tesla were to strike a deal here with sale PetroChina  to roll out a series of charging stations, that could potentially make the China story very interesting

3) Given Tesla’s limited capacity to produce, yet their reasonable price points, I will be very interested to see how they balance out supply and demand.   Their GM is the former GM of Bentley, so they have the sales guy, but I wonder if their pricing will be forced up as cars … or if they will develop a quota system so that deliveries to each country are “fair”.

Either way, I look forward to seeing what their impact will be in China, and what that will translate into in terms of their annual (stock) performance.  There are few firms that are “clean” enough to be able to observe a true China effect these days…

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