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China Market situation and outlook

Discussion in 'TSLA Investor Discussions' started by Cankooo1, Mar 22, 2014.

  1. Cankooo1

    Cankooo1 Member

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    Hello everybody.
    As you can guess I am huge fan of Tesla, small investor and helpfully future owner.
    I am reading this forum from more than a year but finally I have decided totry to contribute here.

    I am starting this thread because I know that China could be really important market for Tesla and as the first deliveries will take place really soon in Chine. Furthermore the effect of China market on TSLA could be significant. I am about to start researching deeper and look for feedback in Chinese consumers, news, publications, registration numbers and all relevant and interesting public information available.

    Actually I have 5 years of experience working with Chinese suppliers and a lot of contacts and friendships there. I have asked them to start looking for information and reactions for Tesla appearance in China. So far few of them are willing to collaborate in my research but I haven’t reach even 20% of my contacts there.
    So stay tuned for further information
     
  2. Chickenlittle

    Chickenlittle Active Member

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    That would be great with several milestones coming up such as first delivery first superchargers. I was hoping when tesla said at last conference call a 1000 cars would be produced but priming the pipe line that he was referring to china since Europe already primed. As usual no analyst thought to ask which pipeline they were priming. It would be nice to get some bilingual posters here
     
  3. DaveT

    DaveT Searcher of green pastures

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    I think you're assuming that Europe pipeline was already primed. I don't think it was as they drained the pipeline to boost Q4 sales.
     
  4. maoing

    maoing Active Member

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    #4 maoing, Mar 22, 2014
    Last edited: Mar 22, 2014
    There are two online articles (in Chinese) about the 1st SHANGHAI demo show for Tesla model S.
    http://club.autohome.com.cn/bbs/thread-c-2357-28577951-1.html
    http://www.sh.xinhuanet.com/2014-03/22/c_133205837.htm

    Some key takeaways from the talk between reporter and tesla representative:
    1) The order # all over the China is "HUGE" -- if reporter describes it precisely
    2) The 1st delivery will NOT happen until April, so Q1 should not count China market
    3) Tesla China is in talk with local government for subsidy, it mentioned SHANGHAI and HANGZHOU which will open Tesla store this year
    4) Not only wealthy class can affort Model S, the upper middle class can also afford Model S with current price tag.
    5) Charger installation is not a problem as soon as owner has dedicated garage or parking space


     
  5. Raffy.Roma

    Raffy.Roma Active Member

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    This is a very interesting thread. Does somebody have some data about the number of Model S reservations in China and how is the situation concerning the installation of the SC network in China?
     
  6. Auzie

    Auzie Tree Hugger Member

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    maoing, thank you for the above info, and please keep posting new info as you come across it. Most people here, including myself, are invested in TSLA and we are very eager to quickly learn any new information on Chinese sales numbers.
     
  7. 772

    772 Member

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    Looking forward to "the fish are jumping in the boat" part deux.
     
  8. Chickenlittle

    Chickenlittle Active Member

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    With all respect not convinced since large numbers of delivery in Norway this month. The timing of first deliveries to china fit the comment that these 1000 cars would be in transit at the close of the qtr.

    regardless, while listening to the cc, I couldn't help but be upset that none of the analyst asked the most import question of which pipeline
     
  9. mrdoubleb

    mrdoubleb Active Member

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    If you can find out... it would be interesting to know if Tesla China already has plans for Supercharger locations/a rollout schedule. That could be a strong indication of orders being "huge".
     
  10. brysondad

    brysondad Member

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    How do charger logistics work in a heavily dense urban situation? Apartment living with no standard parking infrastructure even for "regular" cars?
     
  11. Cankooo1

    Cankooo1 Member

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    China Market situation and outlook for Tesla
    1.jpg


    Shanghai store opening event

    Actually there are tons of publications about the Shanghai opening. I will say confidently that Tesla receives a lot of positive media coverage about the event and this creates a lot of social buzz. The articles are countless.
    The Chinese haven’t received any deliveries yet, but Tesla is already receiving massive media coverage as well as enormous social media attention. The internet is full of articles, I have also managed to find a lot of videos from TV shows where Tesla is discussed in detail. Everything is there from the Tesla ad made by recent college grads to the stock analysis and almost each important piece of news available to us in the US and Europe.
    Some interesting news on the Chinese web:

    • Charging network: There are growing indications that China wants to create its own infrastructure: Liu Zhenya, Chairman of State Grid Corporation of China, stated publicly that there is a plan to publicly open a charging network in China. At the moment it is still not clear how Tesla will participate but it looks like Chinese authorities are trying to avoid segmentation of the charging infrastructure. The charging network will be publicly open and unified for all EVs. Anyway, these plans are mainly for urban areas. I believe Tesla will not rush for mass SC rollout in China at the moment, but will most probably ensure that all their cars have access to existing and future infrastructure and focus on SC when there are a viable number of cars there. Moreover, it appears that at the moment the Chinese are much more interested in the car than in the charging details (this may change with time). Anyway, I have found a person claiming that in the Shanghai event Tesla stated that they will build free charging stations along the Beijing-Shanghai (but it is not yet confirmed by official source)
    .

    • Tesla will receive special treatment from the City committee in Shanghai: the executives are considering incentives to buy Tesla cars.


    • Special customs preferences (this will decrease the time for importing the cars). Usually in China it takes a lot of time for clearance of an imported car, but Shanghai Customs said that clearance process will be optimized for Tesla vehicles and can be done from the declaration to releasing within 24 hours http://tieba.baidu.com/p/2935939329


    • One really interesting article where the reporter went to the shop (in Beijing- opened last November) 30 min before the opening and he saw a queue of people waiting for the store to open. He explained how father and son entered the shop and asked several questions. After less than 20 min they made a deposit for Tesla Model S (http://tech.163.com/14/0322/16/9NV1VIRL000915BF.html)
    • Tesla was mentioned on 22.03.2014 in the China Development Forum by Ma Weihua (Head of General Affairs Office at Bank of China) as cool, very environmentally friendly and creative company. http://finance.takungpao.com/q/2014/0322/2372585.html

    2.jpg
    Sina Technology annual awards ceremony


    • Tesla won two awards: Best Innovative technology products and the Annual Most talked about brand. Veronica Wu, vice president of Tesla Motors for China accepted the award, thanks to on-site IT sector CEO who chose Tesla. She thanked for the efforts and hard work of her colleagues and shared her joy with everyone.
    Official Weibo page of Tesla: http://www.weibo.com/teslaofficial


    Furthermore, Tesla has made some marketing moves like making a 3D panorama app for the store which has received 600 000+ visitors so far: and only for the past 24 hours it has generated 10 000 visits:
    It is better for me to stop if I do not want this post to become 5 pages long. I will add a list with some of the sources, so you can read them with Google translate.


    • Chinese microblogging platforms are floating with attention for Tesla

    3.jpg
    You can see 170 000 accumulated posts for the past month and 40k active users (and still there is not even one delivery in China!)


    • Chinese financial and investment media: “Tesla definitely has the attention of the Chinese investment community.” According to some of the comments on the articles, there are already Chinese investors jumping in to the Board. (This could be a possible factor in why TSLA is holding so strong lately)

    It was mentioned in several articles that people from the IT sector in China are in love with the car and they represent a big part of the orders. They will be the early adopters (not China’s richest people as it was stated earlier). For me this is really positive because the person from the IT field will understand much better the advantages than some millionaire with 10+ luxury cars in the garage. I also believe this is a foundation for much bigger social influence from the early adopters to the mass consumers. http://tech.163.com/14/0322/16/9NV1VIRL000915BF.html - An interesting article about the IT elite in China and how they are aware of Tesla since 2011, as well as how they are the first to make orders.

    First reactions in the comment sections:

    Curios commentators asking questions of all kinds (most of them are not familiar with the matter but are interested).
    Protective and defensive reactions: There are some people out there who believe that they have to protect their domestic production. BYD is often mentioned in similar posts but even there the technological advancement of Tesla is acknowledged. (I do not see this as a big problem like it could be in Germany. Simply, the Chinese are in general used to sell products to America, not to buy US products)
    Concerned comments: Battery, range, price, is it worth to drive EV
    Unrelated comments
    Educated comments and Tesla ambassadors: I am really happy to see in the comment sections people with avatars of tesla and high knowledge of the brand and the car and how they are explaining and educating others.
    Fair pricing strategy is noticed and it is distinguishing Tesla from the other “evil Western corporations”

    Additional observations

    Tesla has really serious intentions in China. On the website there are 23 posted jobs in Beijing and 5 of them are for HR and recruiters. So I believe they will expand their operations rapidly in the short term.
    I do not see a lot of information about the Model X, probably because it will not be available before late 2015-16 in China.
    A really positive fact is that Elon Musk is often mentioned in the articles and there are also separated news about him and his biography. By the way, in Tweeter Elon has 586k followers but in the Chinese tweeter (http://www.weibo.com/elonmusk) he has 557k fans. (update: a 5 000 increase for one day)

    I am additionally researching the topic for reasons for the Chinese government to encourage the Tesla expansion. I believe there are several major reasons, other than pollution. (example: growing foreign oil dependence which is a serious problem in China)
    4.png
    China is not committing in any war affairs to ensure their energy independence in the Middle East. The constant China petrol acquisitions abroad are a really expensive activity. Anyway, there are growing indications that EVs are part of the long term plan of China to reduce the gap. Tesla will surely benefit from this long term policy.
    The incentives are also a really important part of the puzzle: we know about the aggressive pricing in China but if there is an additional discount in the form of incentives this will make Model S an incredible value proposition for the Chinese customers.

    Conclusions:

    I have spent the last few days with intense drilling in the Chinese web searching and reading articles, comments, blogs and posts, together with my friend from China. Based on everything I was able to reach, I believe all indications of blue sky future for Tesla in China are present.

    Based on those, I expect to see exponential growth in reservations for 2014- probably in the second half of the year (note that the feedback from the first customers is still not present but we all know that Tesla can impress the crowd, which could easily lead to the snowball effect in the biggest automobile market in the world).
    My final conclusion is that Tesla is the Apple of the auto industry with one exception: the Chinese will love it!

    Additional information which I am working on
    :

    The information about search engine trends in Baidu (the most popular search engine in China) and a more detailed social media report are still pending.
    Exploring environmental topics and incentives progress for Tesla in China.
    Reservations: I have some clues found on the social media about reservation numbers but I prefer not to share it as it is sensitive, speculative and hard to confirm.
    There are a lot of pieces of information and dots to be connected but the information is a lot. I will try to put it together, but anyway I have also other work to do.

    Resources and articles used in the research:

    I will add list with more links later
     
  12. Cankooo1

    Cankooo1 Member

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    I have collected interesting information for China and have posted it but still it is waiting for confirmation from the moderator :confused:

    - - - Updated - - -

    ok it's here
     
  13. Robert.Boston

    Robert.Boston Model S VIN P01536

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    Posts with links have a higher moderation level built into the system, since spam posts usually have links. Once you've posted a bit more, your posts will go through without falling into moderation.

    And...thanks for the extensive research! Really good news here, especially on a down day for the stock.
     
  14. Cankooo1

    Cankooo1 Member

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  15. AlMc

    AlMc 'Senior Moments' member

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    Cankoo1: Excellent post and information. Very much appreciated. If you have time please continue with your thoughts/impressions and some hard numbers as they come in to your friend in China. Nicely done!
     
  16. Familial Rhino

    Familial Rhino Endangerous Herbivore

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    Excellent research!

    Based on all of the buzz you've sifted through, how much concern is being raised over there about the many apartment dwellers (i.e., that they can't charge at home)?
     
  17. Cankooo1

    Cankooo1 Member

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    Actually the charging topic is not commonly discussed. The reason in my opinion is that there are really big public projects for providing charging infrastructure in the big cities that I believe the Chinese doesn’t care which one they will use if it is available. For example I saw that The National Grid company has plans to invest 3,8 billion yens in charging infrastructure for 197 charging stations. And those are charging stations in the big cities. And when this information is in the same article with Tesla the concerns about charging just does not rise in the comment sections.

    Also my friend told me that in the big cities in the big buildings there are almost always underground parking lots where charging will not be that difficult.
    Actually I saw a lot of people concerning about the battery: if they will have to replace it in a few years and how expensive it could be.
     
  18. hobbes

    hobbes Active Member

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    Cool, that certainly looks good! Thanks for collecting all the info!
     
  19. Johan

    Johan Took a TSLA bear test. Came back negative.

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    Excellent research. Much appreciated! I posted some 2 years ago that China will be the wild card that few yet are seeing the impact of. I think we're starting to see it take shape now.

    Whenever there is something more substantial on reservation numbers I'd love for you to relay it!

    Thanks again
     

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