Home Technology Is Tesla Motors Inc (TSLA) In Trouble In China?

Is Tesla Motors Inc (TSLA) In Trouble In China?

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According to the Wall Street Journal, Tesla Motors Inc (NASDAQ:TSLA) has recently received thousands of orders for its vehicles in China. However, a report from Forbes by Junheng Li is “cautious about the medium to long-term uptake.”

Buyers not visiting Tesla website

Citing Alexa’s global tracking of visitors to the Tesla Motors Inc (NASDAQ:TSLA) website, the report notes that Chinese visitors account for a small percentage of the visitors on the site, a number which looks relatively more minute considering the massive number of Chinese netizens. Though the website tracking data does not indicate the order book strength, it does suggest the interest of public in the brand and products. The number of visitors could be taken as a negative sign for the company considering the fact that the Chinese addressable market is dominated by educated, high income male consumers, who would be likely to visit the company’s website to gather more detailed information on the product.

Overall, this implies that though the PR of the company has been able to a create media sensation along with crowding the company’s only China store in Beijing, “we believe actual purchases could fall short of expectations,” says Li.

A long process

To buy a Tesla Motors Inc (NASDAQ:TSLA) vehicle in China, a customer must first deposit 15,000 RMB. Then the company sends a staff to install the charging equipment in his or her parking lot. After the installation of the charging facility, the order is then made to the manufacturing site in California. From there, it takes 3 to 4 months to manufacture and ship the car to China.

After the shipment, it takes another 10 days to get the Tesla Motors Inc (NASDAQ:TSLA) vehicle out from customs, and then the buyers are notified. The vehicle is then delivered on the payment of balance amount. According to the report, the first Tesla vehicle reached the Chinese customs in Dec 2013, while the first license was issued on Feb 26, 2014. This implies that the deliveries in China are not based on the sequence of orders, but instead rely more on the development of infrastructure and service centers in the region, “a policy that has angered some Chinese customers,” says the author.

Tesla’s home charging solution, which includes a wall connector, provides maximum charges of 40 amps, however, China has a limit 20 amps on residential circuits. Therefore to overcome this limitation, Tesla Motors Inc (NASDAQ:TSLA) would have to negotiate with various parties including property management firms, the fire department and electric power providers.

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Aman Jain
Personal Finance Writer

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