With Tesla Motors Inc (NASDAQ:TSLA) poised to deliver its first cars in mainland China today, a number of customers who have paid for their cars are demanding to know why they are being made to keep waiting. The Model S is selling for $121K in China and will be competing with Audi, BMW, and Volkswagen for consumers who enjoy luxury and expect nothing less.
Lack of patience or difficult launch?
The fact that a group of customers have lawyered-up to complain to the company is not terrifically surprising given the amount of money that a Tesla Motors Inc (NASDAQ:TSLA) costs, and the fact that you are talking about multimillionaires accustomed to getting their way.
“The company told me they are still training electricians in Zhuhai,” said Sam Long, one of the customers demanding an explanation, referring to the southern Chinese city where he lives. “I feel my rights have been hurt.” He is one of 22 customers that have hired lawyers to address the wait.
Tesla is not yet willing to ship cars outside of Shanghai or Beijing according to Tesla spokesman Simon Sproule. “You would never sell any brand unless you have the tools to service it,” he said.
It’s all about charging
According to Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk, shipping 5,000 cars in China would be viewed as a successful first year. This is hardly enough given China’s desire to have a half a million electric vehicles or plug-in hybrids on the road by next year. Down the line, China would like ten times that number by 2020. Presently it looks like it will fall well short of its short term goal.
There is a legitimate lack of charging locations in China. Shanghai for example, has less than 500 in a city with millions upon millions of cars. Presently the capital investment required is a tough sell given the limited return for those that might build up this number.
Tesla hard at work
Tesla Motors Inc (NASDAQ:TSLA) is working hard, however, to change this and keep future and potential customers happy. Tesla says one only needs a fixed parking space to have an individual charging station be it at work or home.
“We’ll also work with property management to find a solution that everyone is happy with. We work with the customer to make sure they have a proper charging option as part of the sales-and-delivery process,” Mr. Sproule said.
“We’re betting on doing the right thing and that consumers recognize…that we’re not taking advantage of them,” Mr. Musk said in the January interview, referring to Tesla’s pricing policy for China.
However, those statements aren’t cutting it for some. “We want Mr. Musk to give us an explanation,” Mr. Long said.