Tesla Aiming for China After Hundreds of Hong Kong Orders

By Alan Wong - Aug 23, 2013 5:01 AM GMT+0800

When Bem Ho discovered the minivan he drives doesnt earn him much respect,
he ordered a set of wheels that will turn more heads: a Model S electric sedan
from Tesla Motors Inc. (TS!"
#Im $ettin$ sic% of drivin$ m& van 'ecause when people see the car the& alwa&s
thin% Im a chau(eur,) said Ho, who runs an apparel manufacturer in Hon$ *on$.
#Itll 'e li%e a tal%in$ point when &ou $o out: +,h thats an electric car.)
Ho is amon$ the -../plus Hon$ *on$ residents who have made refunda'le
deposits of H*0-1,... to H*0--.,... (02,.../034,2.." to reserve a Model S,
even 'efore the compan& has said how much the cars will cost. Thats more
orders than Tesla has seen in the 5.*., 6apan or !ustralia, sales mana$er *enneth
ui said.
The Hon$ *on$ success ma& 'ode well for the 7alo !lto, 8alifornia/'ased compan&
in mainland 8hina, where it plans to open a Bei9in$ showroom this &ear.
#While the in:uence of Hon$ *on$ toward mainland 8hina has decreased
compared to the 1.s, it should still contri'ute to the development of the 'rand in
8hina,) said 7a'lo Mauron, 8hina $eneral mana$er at mar%et researcher ;i$ital
u<ur& =roup.
!s a ma%er of onl& electric vehicles, Tesla faces 'i$$er hurdles than most of its
competitors. 8onsumers in 8hina are put o( '& the price of electrics, and with 9ust
>?@ pu'lic char$in$ stations nationwide, the& fret that 'atter&/operated cars
mi$ht run out of power 'efore the& reach home.
While 8hinas central $overnment is tar$etin$ cumulative sales of 2 million
electric vehicles '& 4.4., automa%ers sold 9ust >4,A1> of them last &ear,
Bloom'er$ Bew Cner$& Dinance reports.
5ntil last &ear, the central $overnment o(ered su'sidies of as much as ?.,...
&uan (01,@.." toward the purchase of electrics, with some cities addin$
sweeteners. In Shan$hai, the total re'ate could top >A2,... &uan, accordin$ to
Bloom'er$ Bew Cner$& Dinance. Since the $overnment support lapsed last &ear,
thou$h, it hasnt 'een renewed.
The aid helped 'oost sales at BE; 8o., the 8hinese automa%er that counts Warren
Bu(etts Ber%shire Hathawa& Inc. as a shareholder. In its hometown of ShenFhen,
@.. of BE;s e? electrics are used as ta<is, while its electric 'uses are in
operation in several cities.
Plush Backseat
The e? costs -?1,@.. &uan without su'sidies, versus a startin$ price of -31,1..
&uan for the 8adillac GTS sedan, accordin$ to pricin$ data from autohome.com.
Mus% has also said the compan& is mullin$ a factor& in !sia, where it mi$ht ma%e
a smaller and cheaper model. Dor now, thou$h, the cars it sells in Hon$ *on$ will
'e made in 8alifornia.
To attract 'u&ers in mainland 8hina, Tesla plans to ma%e the rear seat of the
Model S more lu<urious since man& wealth& 8hinese have drivers, Mus% said on
an !u$. A conference call.
The Model S was desi$ned #to 'e the perfect drivers car,) Mus% said, accordin$ to
a transcript of the call. #,'viousl& if people are 'ein$ driven around, then we
need to ma%e sure the 'ac% seat is optimiFed.)
Hon$ *on$ o(ers advanta$es that Tesla wont Hnd in the mainland. While the
territor& is controlled '& 8hina, it remains lar$el& isolated '& $eo$raph& and
culture. Hon$ *on$s main island is less than >. miles wide // well within the
ran$e of the Model S, which Tesla sa&s can travel more than -.. miles on a
char$e. Its rare for Hon$ *on$ commutes to e<tend 'e&ond 4. miles, and since
the territor&s British colonial masters left a le$ac& of drivin$ on the left side of
the road, its inconvenient for the cit&s drivers to venture into nei$h'orin$ areas
of 8hina.