Tesla Motors Inc (TSLA): Gauging The Chinese Consumers’ Mindset

Hacked Tesla CarUnsplash / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) started selling its Model S sedan in China last month. The electric vehicle maker has partnered with Hanergy to expand its Supercharger network. But just building an infrastructure of charging stations may not be sufficient to Chinese consumers. Kandy Wong of Forbes notes that Tesla might be overlooking a very important issue: the attitude of Chinese car owners towards electric cars.

Tesla and the mindset of ordinary Chinese consumers

Tesla Motors Inc (NASDAQ:TSLA)’s sales team has been targeting wealthy Chinese consumers, who could be in the first batch of its customers. But, says Kandy Wong, the ordinary Chinese consumers should eventually be the key objective. Many Chinese families are still skeptical of committing to a new technology car. Practical concerns weigh heavily on the minds of Chinese people.

Last week, the China Association of Automobile Manufacturers launched a new energy car promotion center in Beijing. The center will exhibit the history of electric vehicles and explain China’s preferential policies along with the distribution of recharging stations. The announcement was an important move considering the concerns ordinary Chinese drivers have about electric cars. A Chinese consumer told Wong that electric cars mean “trouble.” Besides the price, there are a number of pragmatic questions yet to be answered.

Should Tesla spread awareness about EV in China?

Electric vehicle makers, whether it’s BYD or Tesla Motors Inc (NASDAQ:TSLA), haven’t provided consumers much information on how to drive an electric vehicle like Corolla or Buick. They need to spread awareness about a variety of things including safety, durability and recharging. It’s hard to predict how long the transformation from gasoline to pure electric cars will take place. Going by the transition from pickup trucks to small cars, it may take up to 20 years.

Chinese people Kandy Wong talked to said electric car isn’t even a topic among their circles. Chinese consumers focus on practicality. If they think a new technology, no matter how appealing, might expose them to some hang-ups or unresolved issues, they will drop the idea. Tesla Motors Inc (NASDAQ:TSLA) has garnered attention of the Chinese media, ordinary consumers are like bystanders waiting to see if Tesla can succeed in the country.

Tesla Motors Inc (NASDAQ:TSLA) shares jumped 2.20% to $195.76 at 1:14 PM EDT on Monday.

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

About the Author

Vikas Shukla
Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at vshukla@valuewalk.com or on Twitter @VikShukla10

2 Comments on "Tesla Motors Inc (TSLA): Gauging The Chinese Consumers’ Mindset"

  1. Tesla says its sales in China will surpass the Total sales in the US by 2015. But agree on this point that they should understand the psychic of Chinese consumers as its a different demographic area.

  2. With the exception of regenerative braking and; hence, the ability to drive an electric vehicle with essentially once pedal, there is no major difference between driving an ICE vehicle and an EV. To claim that no one has taught the Chinese how to drive an electric vehicle is absurb! There is no need to teach someone how to drive an EV, just let them try it out so they can see how easy it is.

Leave a comment

Your email address will not be published.