Tesla To Produce Cars in China in Next 3-4 Years – TSLA

Tesla Motors (TSLA) CEO Elon Musk, who is recently on tour to China, believes the country has the potential to become the company’s biggest market, with sales that could match U.S. sales by 2015. He told reporters today in Beijing at a packed Geekpark Conference that his company plans to invest hundreds of millions of dollars in the country. He also boldly forecast the electric car maker could soon start producing cars there.

[via Bloomberg] “At some point in the next three or four years we’ll be establishing local manufacturing in China,” Musk said. “China is very important to the future of Tesla. ”

The Silicon Valley-headquartered company is also building a “big” network of battery-charging stations in the country, including superchargers in Beijing and Shanghai. “We’re going to make a big investment in China in terms of charging infrastructure.”, Musk, who once called China a wild card, said, adding that all the power stations will use solar rather than coal power. In addition, Tesla will offer customized service to Chinese users in the future.

While ambitious, the plan of establishing a local production facility would allow Tesla to sell cars at cheaper prices by sidestepping China’s 25% import tariff. Also, some barriers need to be overcome before that – like the fact that electric cars in general are not all that popular in China. Only 14,604 were sold last year.

“I think they can sell quite a few here in the market,” Finbarr O’Neill, president of J.D. Power & Associates, told Bloomberg. “There’s a lot of talk about Tesla but, you know, their numbers are not huge. Mr. Musk has been successful in many fields. I wish him luck, but there’s a limit to every market.”

To be fair, one of the reasons for slow electric vehicle sales is the limited number of recharge stations. China only has 168. With a country as vast as mainland China, many fear they will run out of power before reaching a station.

It is reported that Tesla, which has a distinct advantage over other EVs because of its 300 mile driving range, has received nearly 5,000 orders from the Chinese market, of which at least 200 to 300 are from cities other than Beijing and Shanghai.

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