It's not exactly news when Tesla Motors chief Elon Musk talks big, but his prediction that sales of the Model S electric vehicle in China will require the California-based company to build a factory there is pretty substantial. Musk tells Bloomberg News that Tesla's sales in China could equal those in the US as soon as 2015. Could is the operative word here, though, since he backed off a tad by calling his production more "low fidelity" than firm. Still, Musk says demand will be strong enough that a factory in China could become a reality in the near future.

Tesla recently set the price for the Model S in China at at about $121,000, which is about a 50-percent price premium compared to the US. And while that sounds steep, the extra cost is actually less than the doubling (relative to US) that usually happens when cars and trucks are imported in China. Looks like Musk wants to sell some cars in the People's Republic.

Tesla finished strong in the US last year, moving about 6,900 of its battery-electric Model S sedans during the last three months of 2013. That made it the best-selling US plug-in vehicle during the fourth quarter. We'll be tracking when that same feat is achieved in China.


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  • 42 Comments
      purrpullberra
      • 1 Year Ago
      I agree with you. And that statement did go too far. I meant a lot of people in power see the writing on the wall so to speak and those people are willing to do anything. With the number of people their the numbers of brilliant and forward thinking folks is also enormous. That's where I was coming from. And every day that goes by convinces more and more Chinese people that this is their greatest challenge, not becoming the dominant global power (which is what the military/government want). One must be truly insane to be hard-core capitalist AND hard-core communist at the same time. And even then a lot of people in china seem to be more realistic about pollution and economic advancement than the tea bagging 'conservatives' we have to contend with and overcome here. The future is bleak and bright at the same time; as was written earlier here these new coal fired plants are at least cleaner than the ones they replace. But I hate that I'm breathing in Chinese pollution here in Seattle. I'm as convinced as ever that something like Tesla and the ModelS can stimulate the best and brightest in china (that aren't working for the military) to make their own technological leaps ahead. I'm barely hopeful but that still makes me an optimist. :-)
      EZEE2
      • 1 Year Ago
      Hey CoolWaters! New advancement in solar cell technology, as printed at our friend's site, realclearenergy.org: http://phys.org/news/2014-01-solar-cell-technology-captures-high-energy.html And here is the good part, it was developed jointly in Texas (well wait, I know you won't like that) with the department of energy! Government YAY! Never say I don't give you anything or am not nice.
      Levine Levine
      • 1 Year Ago
      If Tesla gains a strong hold in China's EV market, the Tesla's proprietary electric charge connector will become the standard rather than the SAE or CHADeMo.
      Marco Polo
      • 1 Year Ago
      Elon Musk may discover that producing manufactured goods in the PRC for export, is encouraged by the PRC government, but producing locally, for the local market, and repatriating profits, is most definitely not ! The PRC has a long record of inviting companies into establishing manufacturing, especially if those enterprises bring sought after technology, expertise and capital. As long as the enterprise is basically export oriented, then the PRC government (and local governments) will do everything to assist the enterprise. The problems begin when the labour force is fully trained, the technology understood, (even improved) and the capital inextricably committed. If the business is export oriented, or it's overseas parent is a massive importer from the PRC, government assistance is assured. However, if at this stage, the enterprise caters largely for the domestic market, difficulties and problems start to eventuate. The escalation of these 'difficulties' is subtle, and never completely ruinous, just enough to cause the foreign parent company to eventually cut it's losses, and sell out cheaply to PRC interests. Part of the problem is that PRC commercial law, and the legal system, operates on fundamentally different principles and practices. I wish Elon Musk and the Tesla team every success, but Elon should remember that Dragons were famous for more than just breathing fire, they were also gifted with the power of persuasive deception.
        bluepongo1
        • 1 Year Ago
        @Marco Polo
        Way to spin this negative.... I guess you don't really care about using less bunker oil which you claim (without proof.) Tesla Motors uses.
          Marco Polo
          • 1 Year Ago
          @bluepongo1
          @ bluepongo1 Goodness me, you never cease to amaze me with the almost religious zeal of your devotion and adoration of Tesla. Look, I like Tesla, (I'm even eagerly awaiting my RHD model S), but now you're just being silly ! " Tesla sites are all self-contained and don't use easily undermined supply "... er...what's 'undermined' supply ? " materials in Tesla Motors were air lifted there" ...um.... I think you've got Tesla confused with Berlin in 1948 ! Tesla doesn't manufacture paint, tyres, wheels, batteries, glass and a host of other things on site. Tesla, like all other manufacturers, Tesla has a supply chain of outside suppliers. "we're aero-space engineers " Oh, ...and I didn't realize you worked for Tesla, as an aerospace engineer, no less ! ( perhaps you could have helped Ezee with his rocket ! : ) . There's nothing wrong with world trade, and by weight of goods carried, ships are very efficient. It's just getting rid of the highly toxic and pollutant fuel, that's required, not getting rid of shipping ! (especially not changing to air freight).
          bluepongo1
          • 1 Year Ago
          @bluepongo1
          @ Marco If you've ever been to any of the Tesla sites you'd see they're all self-contained and don't use easily undermined supply. Most of the materials in Tesla Motors were air lifted there... we're aero-space engineers remember? I realize I'm wasting my time with someone who can't figure out how a factory on every continent would save shipping pollution/ costs. I guess the investment fraud will end when Lotus & Panasonic finally go bankrupt because they never had and never will have ties to Tesla Motors' successful products.
          Marco Polo
          • 1 Year Ago
          @bluepongo1
          @ bluepongo1 Just when I thought your comments couldn't get weirder, you excel yourself ! The answer to the pollution created by using Marine grade No 6 fuel for shipping, is not to stop international trade, but simply for the maritime nations to compel ship owners and freight companies to stop using bunker oil, and convert to alternate fuels. I glad to say that after many years of campaigning, the EU is beginning to enforce new restriction on bunker oil usage, and the IMO is slowly being dragged into compliance. Tesla Motors imports , various components to the USA, including batteries.Tesla has no alternative, but to receive containers transported by ships using bunker oil, since nearly all vessels entering US ports, made the blue water part of their journey using bunker oil. But, if you can show me where Elon Musk insists on chartering one of the few container vessels, owned by the Maersk line, not rigged for Bunker oil use, I will be delighted ! But, what's all that got to do with the internal problems of establishing business in the PRC ?
          bluepongo1
          • 1 Year Ago
          @bluepongo1
          @ Marco What's weird is: you think you know everything- except - word definitions!!! So it's a waste of time trying to help you, go ahead and drink your own Kool-aid. BTW I don't work for Tesla Motors, Tesla Motors works for me- M.H. Kane (@ bluepongo1 is my brothers unused account, my tech isn't online for security reasons. )
          purrpullberra
          • 1 Year Ago
          @bluepongo1
          Didn't Nissan build new boats to ship Leaf's (or parts) here? 1 car company tried to make a difference but I do not know the type of fuel the ships used. Ghosn has balls.... but Tesla is already fighting enormous fights, they simply can't take on the entire shipping industry.
          Marco Polo
          • 1 Year Ago
          @bluepongo1
          @ purrpullberra You are absolutely correct, it would be absurdly impractical for Tesla to investigate the type of shipping for every delivery, (if not impossible). Nissan own and operate a shipping company, Nissan Motor Car Carrier line, in conjunction with Mitsui O.S.K. Lines. Nissan also owns Euro Marine Carrier shipping. Nissan operates the 11,400 ton, Nichioh Maru (Roro), a very advanced roll-on and roll-off ferry Twice a week the Nichioh Maru makes a 1,800 km voyage from Yokohama, to Kanda and Kobe carrying 1,380 vehicles. The Nichioh Maru is a remarkably energy efficient vessel, being equipped with electronically controlled diesel engine, LED lighting, 281 solar panels, special coating on the hull to reduce friction etc. Not only does the Nichioh Maru not use toxic bunker oil, but also save over 1200 tons of fuel annually, while also reducing CO2 emission by 5000 tons. The Leaf Carrier you remember, is the enormous 21,000 ton, Panama flagged, City of St. Petersburg. The City of St. Petersburg is rigged for bunker oil fuel usage, but claims 'green' credentials for its unique bow design that reduces fuel consumption by 1-2% annually. Still it's good to see, Nissan along with the pioneering Danish Maersk line, starting to respond to the deadly problem of bunker oil usage.
          Marco Polo
          • 1 Year Ago
          @bluepongo1
          @ bluepongo1 Like I say, seek professional help.
        purrpullberra
        • 1 Year Ago
        @Marco Polo
        If Elon is ready, willing and able to do anything it takes to stay ahead of the competition Tesla can survive manufacturing in China. I'm fine betting on that. If anyone could show china something about setting outrageous goals and exceeding them it's probably Elon/Tesla. (As if they need that lesson.) Tesla have to be ready to lie, cheat, hide technology and give the authorities the run around endlessly. The exact things they expect a smart company to do. I doubt that Elon is ruthless enough to out-deceive the masters. Innovation, change, turnover and separation of related tech could help keep the important stuff as secret as possible. If Tesla aren't expecting the worst infiltration and corporate espionage on the planet they would be idiots. And besides considering Texas for a plant location Tesla have never shown anything less than stellar (not flawless) business sense.
          Edge
          • 1 Year Ago
          @purrpullberra
          What stops the Chinese from buying a Tesla, and ripping it apart to study it's technology? The Chinese already make electric motors, and produce batteries. They could even buy batteries from Panasonic, just like Tesla. You post sounds like drama for some Hollywood movie.
        Edge
        • 1 Year Ago
        @Marco Polo
        What a bunch of nonsense. Where are getting your information from? Many western auto companies have setup manufacturing in China, with the required partnerships with local Chinese auto companies, and are doing very well there selling only to the local Chinese market. I've been following closely the Chinese auto market for years, and have never heard what you're claiming. Sounds like the typical anti-Chinese bias, that people just readily accept, without giving it much thought.
      2 wheeled menace
      • 1 Year Ago
      Makes sense. The upper and middle classes are still growing at a fast rate, and they have 3-4x the population that we have here.
      purrpullberra
      • 1 Year Ago
      Putting production in China is a move that should not be taken lightly. I'm not sure there is a way to avoid it but they should attempt to keep as many secrets as possible from the Chinese as long as possible. There is a long and well documented tendency to be ruthless in business in china, as in other places, so it makes sense to be on guard for any espionage or rouge elements inside foreign operations. I think westerners are afraid that that type of thinking is somehow racist and that the generalization isn't helpful. But it's just like how we in the west aren't used to negotiating prices on Everything the way many other cultures do. We seem sort of stupid to those cultures and there is no reason to not take advantage of 'us' because of that. To not be on guard for Chinese 'infiltration' is to be racist, why wouldn't they be ready and willing to do whatever it takes? It is a part of the culture in the same way that early Americans showed zero respect for British laws when it made sense to do so. I don't really blame the Chinese for that. I think they are smarter for it and their society is definitely ahead of where it would be without such resourcefulness. It's just something that Tesla and any western company needs to be constantly aware of when they take the plunge into a huge market that is so different from our own. The Chinese will learn everything about whatever you bring into the country because they can and should. Look at it from their point of view. That said, I'd be loath to bring in any production of motors, supercharging abilities any sort of tech that puts Tesla way ahead of the rest of the industry. But with reverse-engineering I suppose there is only a few years left in this generation of Tesla tech. Constant innovation is the only answer to entering that market. And I happen to think the Chinese government is happy with that as they are desperate to clean up pollution in every possible way. I wonder how closely Tesla has been negotiating with the government. They could get along very well considering all the goals they share. But who knows....
        Technoir
        • 1 Year Ago
        @purrpullberra
        Maybe they can import some of the high tech parts for assembly in China.
        Marco Polo
        • 1 Year Ago
        @purrpullberra
        @ purrpullberra, I think most of your post is a very sensible assessment of doing business in the PRC. I'm not sure that the Beijing government is all that "desperate to clean up pollution in every possible way". Undoubtedly, there are PRC officials and politicians who are genuinely concerned, but in my experience, the majority simply accept pollution as the natural consequence of prosperity and manufacturing success. The PRC will continue to roll out over 1000 huge new coal fired power plants, the giant PRC oil companies will continue their expansion, and most of the PRC power brokers see propaganda, and lip service to environmental goals, as a cheaper, and more expedient, method of dealing with an gullible Western criticism , than actually spending the money and effort needed to fix the problem.
        DarylMc
        • 1 Year Ago
        @purrpullberra
        Hi purrpullberra Not to put down the work Tesla has done to get an excellent EV to market. I don't think it is a risk for Tesla to sell or manufacture the vehicles in China. Whatever technology can be copied will be copied regardless.. And this would apply to any country which has the ability and motivation to have a go at it.
          Nick Kordich
          • 1 Year Ago
          @DarylMc
          Agreed - the technology is not so complex that it can't be copied. The true barrier to rival production and sale based on your intellectual property is the legal one. As an outsider, you may be at a disadvantage, but you're less of an outsider for having a long-standing presence in the court's jurisdiction. Imagine someone started up an EV company in America making (unlicensed) clones of the Nissan Leaf. If Nissan was unknown outside of Japan, a local judge isn't going to weigh their claims the way that a Tennessee judge might view their claims today, having their plant right down the street, with Nissan's case being presented by a Tennessee law firm they've had presenting their side of things before that very judge for the last fifteen years.
        DaveMart
        • 1 Year Ago
        @purrpullberra
        Musk will have little or no concern about Chinese copying. He sets up his businesses so that they are in constant motion, and would regard a year without radical shifts in his set up and production flow as lost. By the time they have copied what he is doing, he will be doing something else. Or at the very least, that is what Musk figures.
      Joeviocoe
      • 1 Year Ago
      “Long-term there’s no question we’ll have a factory in China,” he said. “There is an argument for having that be our first major factory outside the U.S.
      Electron
      • 1 Year Ago
      Car economics dictate that there is substantial advantage in production close to or in the target markets. That way one limits transportation cost and more importantly dodges tariff barriers. So Elon Musk's announcement is hardly surprising: for any high volume model production in the world's largest car market is more or less unavoidable to remain competitive. The Chinese will make sure of that anyway.
      bluepongo1
      • 1 Year Ago
      @2EZEE http://motherboard.vice.com/blog/2013-was-the-biggest-year-for-exploding-oil-trains-in-four-decades
      EZEE2
      • 1 Year Ago
      Under liberal rules, pretty much all associated with oil companies is evil, even though they invented the lithium battery, spent huge dollars on solar, etc. the same applies to Texas, Koch brothers, and the demon of the week.
      • 1 Year Ago
      China always uses this method to copy foreign technologies. They just copied America's most advanced nuclear reactor, the AP-1000, and now they plan to export their cloned AP-1000 reactor to other countries. Maybe they could get Elon's Space X to manufacture their rockets in China too:-) Marcel
        purrpullberra
        • 1 Year Ago
        I'm afraid I tend to agree with you. China does require 'partnerships' where the underlying technology is basically 'given' to them in every industry. Boeing plane parts are built there to help them build the most high-tech parts for the betterment of Chinese planes, even war planes. Boeing did it in the name of union busting, just like the HQ moved to Chicago the year after a contentious strike and the production move to S. Carolina as soon as they built a dumpy factory there. Every single plane has had to be flown to Seattle to be fixed before delivery. The equivalent has happened in the car industry. It's not the manufacturing that Tesla could lose to china but the battery pack tech, the motor tech, the electricity tech, the stuff that puts them years ahead of everybody else. But it is the price you pay for entry into that market. I don't see a way around it. The only response is to continue to innovate.
          woot
          • 1 Year Ago
          @purrpullberra
          lol @ lose battery tech, Tesla buys cells, there is nothing unknown about pack and most likely cells are manufactured in China only cathode material is imported from Japan
          purrpullberra
          • 1 Year Ago
          @purrpullberra
          Woot, dude, the way they build/wire up the packs at the Fremont factory is a HUGE part of why their battery is as far ahead of the rest of the industry as it is. Just think of supercharging and what it takes to 'drive' that kind of current into simple laptop batteries. Additionally, Panasonic has somewhat changed the batteries they make for Tesla from the old, common laptop variety. I've never heard that anyone else is able to buy them, Tesla gets every last one of them contractually, I believe. The wiring of the batteries and the motor/inverter is unquestionably one of the most important technologies Tesla owns, trust me, there is no doubt about this. And most if not all of it is patented.
          Edge
          • 1 Year Ago
          @purrpullberra
          > "the stuff that puts them years ahead of everybody else" Yeah right! What a joke. Great design, but technology ahead of everyone else? A bigger battery bought from a Japanese company, get them the great range they get, but at a high price for the car. Not knocking Tesla here, as I really like the Model S.
        Levine Levine
        • 1 Year Ago
        Big claims require big proof -- Carl Sagan. Prove it.
      Marco Polo
      • 1 Year Ago
      @ purrpullberra We seem to be in agreement. The leaders of the PRC are no longer 'communist'' in any economic sense, nor is the ruling elite 'monolithic' or completely inflexible. The nation is evolving, and although to outsiders, the PRC presents a united face, internally there are a number of competing factions, jockeying for power and influence, but all wary of allowing any potential demagogue to arise. There's no doubt that the leaders of the PRC are earnest in wanting their children and grandchildren to enjoy a better, happier, healthier life. Exactly what the crazy right in the US want, isn't exactly clear, even to them ! The Ultra right is more about what they're against, than any meaningful vision of the future.
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