Reciprocity
Active Member
Not that I think Tesla will make such profits in the near future (3 years). But you forgot the profit splitting between the joint venture partner and Tesla. The partner won't be putting up investments for nothing. The batteries still need to be imported, unless M3, MS and MX built in China will use China made LiFePO4 cells.
IMO, the China plan is hastened because of China curbing excess EV production. With current low volume of production for Tesla, there is very little benefit in setting up another factory in China. The factory cost has to be amortized over the low volume sales in China. Model 3 will face steep competition in China, where it will need to compete on value, not just status as in the case of Model S&X. I don't expect more than 2k per month M3 sales in China for many years.
China's New Rules: Tesla Must Stay Home, Used Car Factories Go Up In Price
Have you even seen a Chinese made car? Competition won't be an issue. You so realize Tesla makes batteries right? You help saying they will have to import them, why wouldn't they make them there? Is it against a Chinese law?
Elon met with the vice primere of China. I am about 100000% sure that the Chinese get that Tesla isn't going to give them a 50% ownership, Tesla would rather make there cars on the border and pay the taxes. Is Tesla goes to China it will be because China was willing to make up new rules just for Tesla, kinda of like they do here in America with the franchise dealership rules only in the opposite direction. China needs Tesla to help it save it's life blood, it's people, who are choking to death in their cities and that is with most people riding bicycles. It's a real issue that will only be magnified by 24 million more cars per year and unlike the US, many of those are first time car owners. In a sense, whether China lives or dies is on the back of Tesla.
I predict that they will announce a deal to build a factory in China and the terms will anger many who didn't get the kind of deal Tesla did. This thought that Tesla needs China more then China needs Tesla is silly. Tesla can sell 10 million cars per year without any factories in China and with countries throwing themselves at Tesla like a teenage girl at a Justin Beeber concert.
But hey, good FUD man, hope lots of shorts buy into that dribble.