Tesla Motors Inc (NASDAQ:TSLA) is looking forward to catching consumer attention in China after it has successfully sold its Model S in United States and made a debut in Europe. China is the world’s biggest auto market and CEO Elon Musk has said that China might be the “Wild Card” in the company’s future.
There has not been any announcement from Tesla Motors Inc (NASDAQ:TSLA) recently as the company is gearing up to report its earnings on August 7. There was no comment from any representative of the company. However, they said that Tesla Motors Inc (NASDAQ:TSLA) would be giving further information about the China strategy next month. Chinese media and Asia auto experts are, however, releasing some or the other news about Tesla.
First showroom in mainland China
The electric car company has announced to open its first showroom in mainland China towards the end of the year. The showroom is in central Beijing at the exclusive Parkview Green mall, which is a plaza designed in the shape of a pyramid with sky gardens and atria spaces. The plaza has been certified LEED Platinum for its energy conserving design for the first time, and its 8,000 square foot showroom will be approximately three times larger than its U.S. showrooms.
China a potential market for Tesla Motors
China is seeing rising demand for luxury automobiles, which will be a significant growth driver for Tesla Motors Inc (NASDAQ:TSLA), making China an obvious choice. Approximately 19 million vehicles were sold in China in the previous year. Automobile juggernauts like Audi AG (ETR:NSU) (FRA:NSU), Bayerische Motoren Werke AG (ETR:BMW) (FRA:BMW), Mercedes-Benz and Porsche Automobil Holding SE (ETR:PAH3) (FRA:PAH3) are witnessing growing popularity and Tesla will position its Model S as Luxury model.
“China is the biggest auto market in the world, and that’s why Elon Musk is really pushing for sales in China,” said Mike Omotoso, senior manager of global powertrain forecasting at LMC Automotive in Troy, Mich. He added that the showroom is being constructed in Beijing similar to Rodeo Drive and Model S will be a symbol of being wealthy but environmentally responsible, says a report from DenverPost.
China has been struggling through air pollution and the government strongly backs electric vehicles especially local auto manufacturers like BYD and Kandi. McKinsey & Co in a research report found that Chinese Consumer is ahead of any other country in terms of spending on luxury products, jewelry and clothing.
Some doubt the move
However, not everyone is optimistic on Tesla Motors Inc (NASDAQ:TSLA)’s success. A group of experts is skeptical about the growth of Tesla in China due to lack of charging infrastructure, lack of government incentive, and increase in price of Model S due to luxury and import taxes.
Christopher Foss, senior manager at Dunne & Company in Hong Kong said that China and Hong Kong are different markets as Hong Kong is a wealthy island state with less population, which is an ideal market for Tesla.