China Market situation and outlook

[davecolene0606]

A couple more thoughts on China. I was struck by this picture recently posted in the Charging Infrastructure forum of a Beijing Supercharger completely blocked by ICE cars parking in it.

View attachment 66065

Ever since China opened up to foreign investment in the 1990s, people and companies have been trying to cash in on China's economic renaissance. I once read a book about what happened to a well intentioned investment bank that sunk almost a $1B into various investments in China. They all ended up going south - not because the underlying business was bad, but because the Chinese "partners" arranged things to essentially strip out the business value away from the foreign investors. They used some pretty underhanded tactics - like kidnapping the foreign general manager in his office with a literal mob of "angry" workers blockading the door unless he agreed to changes. Other times, the Chinese partner just never paid profits back to the foreign partner and dared them to go to court - and the courts sided with the Chinese partners. Corruption writ large.

Now, I have no idea if Chinese courts and business practices have gotten better since the 1990s. But I know that if I was BYD, the large Chinese automaker with EVs of its own, I would do things to throw sand into the gears of Tesla motors. Like work connections to make sure there is a car parked in each and every one of Tesla's Superchargers. All the time. And good luck appealing to the local authorities to help you with that problem.

Also, while Elon is being Elon and making sure his Tesla China general manager is actually following Tesla's corporate's instructions, the fact is that he has fired two general managers so far. Both of which no doubt have lost tons of face, while having connections in the rest of the Chinese business landscape. Elon appears to be charging into China with sharp elbows. I just wonder how the local businesses, employees, courts, and customers are going to react.

One final point - before Tesla entered the Europe mainland, Elon stated that he expected Germany to be a big market. And certainly, Tesla has invested a lot of money there in the form of stores and Superchargers. However, it seems that Germans like their homegrown car companies. They also don't like EVs in general. Anyways, I think Tesla has been surprised by the tepid reception they have received in Germany so far.

Well, at least they haven't resorted to throwing trailer hitches and various I sundry I beams of metal in front of Teslas on highways to "see what happens"....

 

[DrTaras]

Apparently China looks very much like Hawthorne!
Tesla's China VP Steps Down After 9-Month Stint
http://english.caixin.com/2014-12-15/100763441.html

 

[ggr]

Apparently China looks very much like Hawthorne!
Tesla's China VP Steps Down After 9-Month Stint
http://english.caixin.com/2014-12-15/100763441.html
View attachment 66124

Yes, it's all the bamboo.

 

[Richard Benson]

Now, it's to be expected. The value of the Model S is nowhere else so high as in Red China. Red China is, after all, a developing country. Ms. Wu was under intense pressure to deliver to customers willing to pay a premium. Musk refused premiums and was willing only to sell first come first serve. Obviously, the pressure was just too great, leading to complaints. Had she been a dealer instead of a factory representative, she could have just held auctions as the cars came off the boat and made everybody happy, but no. Musk demands the absurdly low price (US sales price + duties + shipping) and problems arise inevitably.​

 

[Robert.Boston]

Moderator's Note

Some posts about Indonesia were moved here: 2015 Outlook Tesla Motors geographical expansion of sales and service activities.

 

[maoing]

China Q4 imports:
Oct. 110
Nov. 803 (record high month)

YTD: 4344

source: http://live.wallstreetcn.com/livenews/detail/224169

I think China market will be ending up sales number between 5K and 6K for 2014. It's in line with Elon's initial expectation >5000 sales. No surprise though!

 

[Ingenieur]

Actually it is not quite highest, June was 958 and August around 950, but nice to see some flow after weak October at 110, weakest since April at 53
Also hitting 5000 will be a hard as even if they import 1000 cars in December, they have to effectively sell 5000 out of then total imported 5344 cars, mind loaner, test drive cars and pool vehicles for tesla mgmt. Also mind delay at customs and customers delaying the delivery due to financial constraints.

 

[FluxCap]

BYD Stumped by Stock’s Record Slump in Hong Kong - Bloomberg

Very strange. Anyone have more info on this?

 

[swaltner]

BYD stock price drop... That looks like a feedback loop in the trading bots. The sell off kept speeding up over the course of the day and there apparently wasn't any news that triggered the sell off.

 

[dgh]

A couple more thoughts on China. I was struck by this picture recently posted in the Charging Infrastructure forum of a Beijing Supercharger completely blocked by ICE cars parking in it.View attachment 66065Now, I have no idea if Chinese courts and business practices have gotten better since the 1990s. But I know that if I was BYD, the large Chinese automaker with EVs of its own, I would do things to throw sand into the gears of Tesla motors. Like work connections to make sure there is a car parked in each and every one of Tesla's Superchargers. All the time. And good luck appealing to the local authorities to help you with that problem.

While I have no doubt BYD is letting its wishes and and asperations know to government policy markers that would give it an advantage, parking etiquette in Beijing is non-exisitant. Cars parked in the most curious places is common place. Cross walks, sidewalk, even right in the middle of the street (as if it make it a highway divider). Empty parking stalls with a no parking sign are ignored. It is common for many parking spaces to have physical barriers (which you have to use a key to disable - quite an annoyance every time you leave or enter your "reserved" parking space) to keep others from parking. Towing and booting of cars in Beijing is very rare. Private parking lot owners as well as the police seem powerless. I think a parking ticket is 200 RMB, about $ 30, which means nothing to anyone that can afford a luxury vehicle. I live in Beijing (don't have a car here, so not too easy to visit the supercharger), but I'll try to stop by to monitor and post occasional reports. I'd have to imagine that Tesla will employ an attendants to try to keep the spaces from being ICED. The salary would be about $ 300 a month.

 

[Johan]

They need SC security in China.

 

[chickensevil]

Now, it's to be expected. The value of the Model S is nowhere else so high as in Red China. Red China is, after all, a developing country. Ms. Wu was under intense pressure to deliver to customers willing to pay a premium. Musk refused premiums and was willing only to sell first come first serve. Obviously, the pressure was just too great, leading to complaints. Had she been a dealer instead of a factory representative, she could have just held auctions as the cars came off the boat and made everybody happy, but no. Musk demands the absurdly low price (US sales price + duties + shipping) and problems arise inevitably.​

Im sorry was that seriously a case FOR price gouging? *shakes head* that is something that should never happen. I deplore scalpers. A dealership is just a sanctioned form of scalping... charging people some 200k+ for a BMW i8 here in the US was bad enough. Keep that stuff relegated to the grey market and leave it out of formal business practices thank you very much.

By that logic, When Sony and MS release a new gaming console they should be price gouging out the gate on their products because clearly people are willing to pay 2x the price or more for the "latest" console. So obviously the pressure is just to great leading to complaints. So had Sony and MS just auctioned off all of their consoles in the first few months it would have made everyone happy but no. They demand the absurdly low price and problems arise inevitably (like people fist fighting over these new consoles or hawking them on ebay at multi thousand dollars a piece.).

Could really apply that logic to... well... just about any hot new product to hit the market... iPhone 6, anyone?

Just because you can do something doesn't mean you should.

 

[32no]

Why haven't we brought up China import numbers yet? YTD from January through November totals 4344, with 803 in November LINK

Q2: 1545
Q3: 1888
October: 108
November: 803
December: Needs to be 656+ to meet Musk's guidance of 5000 cars in China in 2014.

 

[maoing]

It's reported in #666 already. But thanks for nice summary again. I have no doubt the 2014 import number will exceeding 5000. If the sales number divided by super charger station and SC #, I believe China market would be the most efficient one for TM.

Why haven't we brought up China import numbers yet? YTD from January through November totals 4344, with 803 in November LINK

Q2: 1545
Q3: 1888
October: 108
November: 803
December: Needs to be 656+ to meet Musk's guidance of 5000 cars in China in 2014.

 

[schonelucht]

Do we have any visibility on the time between a car being accounted in the 'imported' numbers above and delivered to a customer? Is that generally less than a month?

 

[ItsNotAboutTheMoney]

Im sorry was that seriously a case FOR price gouging? *shakes head* that is something that should never happen. I deplore scalpers. A dealership is just a sanctioned form of scalping... charging people some 200k+ for a BMW i8 here in the US was bad enough. Keep that stuff relegated to the grey market and leave it out of formal business practices thank you very much.

By that logic, When Sony and MS release a new gaming console they should be price gouging out the gate on their products because clearly people are willing to pay 2x the price or more for the "latest" console. So obviously the pressure is just to great leading to complaints. So had Sony and MS just auctioned off all of their consoles in the first few months it would have made everyone happy but no. They demand the absurdly low price and problems arise inevitably (like people fist fighting over these new consoles or hawking them on ebay at multi thousand dollars a piece.).

Could really apply that logic to... well... just about any hot new product to hit the market... iPhone 6, anyone?

Just because you can do something doesn't mean you should.

I think his point was really that in a culture where wealthy people expect money to talk and throw tantrums when it doesn't, Ms Wu's job would have been very unpleasant; and that had they allowed at least some "auctions" to skip the queue, some of that pressure would have been relieved. To avoid negative PR they could "spread the wealth" and put additional earnings into additional Superchargers, or to charity.

 

[bluenation]

I think his point was really that in a culture where wealthy people expect money to talk and throw tantrums when it doesn't, Ms Wu's job would have been very unpleasant; and that had they allowed at least some "auctions" to skip the queue, some of that pressure would have been relieved. To avoid negative PR they could "spread the wealth" and put additional earnings into additional Superchargers, or to charity.

whatever she chose, she should at least have coordinated or advised HQ, not let Elon find out on an awkward presser

it seems communication problems is kinda endemic ..

 

[JRP3]

Tesla Motors Inc. (TSLA) will help Chinese buyers trade in their old cars if they buy a Model S, part of the automaker’s latest efforts to spur sales of its all-electric sedan in the world’s biggest vehicle market.

http://www.bloomberg.com/news/2014-...ese-buyers-trade-in-old-cars-for-model-s.html

 

[maoing]

China super charger station update http://www.tesla.cn/supercharger, it's out dated on TM's official webpage. 51 now (including 3 in Hongkong). More importantly, the super charging corridor connecting Beijing and Shanghai up and online. In the past week, there was 6 super charger stations opened. The super charger station deployment speed is "far" exeeding most people (including Elon) expectation which was not optimistic due to high land cost and bureaucracy in China. So that's no surprise the head of supercharing team took over the position of Veronica Wu recently.

 

[ScepticMatt]

Thank you for your posts maoing. Where do you get the most up-do-date info?
All I can see is second-hand info from users on autohome.


I wouldn't call the Beijing-Shanghai "up and online" just yet.
A owner did a range charge drive in a 85 from Jinian to Beijing and arrived with 16 km left.
That's not a lot of buffer for bad conditions and impossible to do in the 60.
They need one more near Jining and Bengbu to bring it in line with US/Norway route distances.