Tesla Motors Inc (TSLA) Targets China’s Wealthiest Customers


Tesla Motors Inc (NASDAQ:TSLA) apparently sees big opportunities ahead in China. The automaker recently started taking orders for its Model S sedan there, and one of its executives told China Daily (reports Street Insider) they will be targeting “more first-tier cities” in order to reach a greater number of China’s wealthiest consumers.

Tesla has “great expectations” for China

The VP for Tesla Motors Inc (NASDAQ:TSLA) reportedly told the newspaper that they have “great expectations for the market in China” and that they plan to open showrooms in a greater number of the nation’s wealthiest cities. He also said that the challenge they will face is satisfying the “high demand in China.” It’s believed that Tesla has preorders for hundreds of its electric sedans in China. The automaker has been accepting orders for the Model S for months and only recently started taking preorders for the Model X crossover vehicle there.

Potential problems for Tesla in China

Shares of Tesla Motors Inc (NASDAQ:TSLA) moved higher in afternoon trading today, increasing more than 3% as investors consider the opportunities available to the automaker in China. However, there are some issues Tesla will still have to deal with there. Perhaps the most important one is the price tag for its vehicles. Chinese officials have not yet determined exactly what kind of taxes Tesla will have to pay. The final purchase price of Tesla’s vehicles will depend on how much those taxes are.

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In addition, Chinese automaker BYD has launched its electric vehicle there just last week. The automaker’s cars do not have the long range that Tesla’s do, but BYD is emphasizing that the range its vehicle does have is enough for most urban dwellers in China.

Tesla Motors Inc (NASDAQ:TSLA) is dealing with a bit of an identity crisis there as well. The automaker encountered a trademark issue with a Chinese businessman who owns the Chinese phonetic sounds of the Tesla name: Te Si La. Tesla adopted the name Tuo Su Le instead, but it did not immediately choose Chinese characters to represent its brand, thus opening it up to criticism and some unflattering suggestions from people trying to express their disdain for the brand.


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