Okay. Everyone take a deep breath. Elon Musk never said every Tesla Model 3 would be manufactured in China. No need to let your xenophobia kick in to overdrive. What he did say during a talk at Tsinghua University last week was that Tesla intends to build cars for the Chinese market in China and is exploring partnerships with local Chinese companies before deciding where to build its Chinese factory. He took to Twitter over the weekend to explain that production in China is expected to start about a year after it begins in the US.
We know that Musk was scouting locations for a factory in Europe during his tour of the Continent last month, so none of this should come as any surprise. Now that we all have our feet firmly planted back on the ground once again, let’s recap what we know.
A. China has high import duties on foreign cars. Every major manufacturer who sells cars in China has partnered with a local company to build its cars domestically. Tesla thought it could buck the trend, but found out it could not. When it comes to electric cars in particular, domestic models enjoy significant advantages, like access to scarce registrations and public charging stations.
B. Tesla sales in China have been disappointing, and that’s being kind. In the end, even Elon Musk’s dauntless charisma was no match for Chinese social and commercial norms. The idea of a factory in Asia is a good thing, though. China and its neighbors form the largest car market in the world. Tesla is now making sensible plans to compete successfully in that market.
C. Tesla is also looking to build cars in Europe. Despite the fact that it will surely deliver thousands fewer cars in 2015 than it projected, it is still bullish on its prospects for the future. The idea of Tesla factories around the world should worry executives at all major car companies. Tesla is not going away any time soon, even though they may wish it would.
Elon Musk has many admirable qualities, but public speaking is not one of them. Much of what he says is ambiguous or disjointed. It’s easy to imagine a native Chinese speaker being confused by his words. It’s all good, though. The Tesla juggernaut is on track. But will it be on time?
Source: CleanTechnica. Reproduced with permission.
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