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China Market situation and outlook

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I didn't realize that hadn't already been worked out.
They were working on it for almost two years. Initially they were pushing China to use standards that they already are compatible with. That didn't work out. So then they developed adapters, which was in beta testing for a few months earlier this year. Now the testing is completed and all current owners are given the adapters. In the near future they would just build the cars with two ports. Similar to European market solution.
 
"VW considers setting up commercial vehicles venture in China
BERLIN/FRANKFURT (Reuters) - Volkswagen (VOWG_p.DE) may expand cooperation with China’s Anhui Jianghuai Automobile (JAC) beyond electric cars to jointly develop and build commercial vehicles in the world’s largest autos market.

The German group and JAC announced in June they were to set up a joint venture to develop and build zero-emission passenger cars as Volkswagen (VW) is pushing efforts to achieve the Beijing government’s production and sales quotas for new-energy vehicles.
On Monday VW said it was looking along with its commercial vehicles division at deepening the cooperation with JAC to include the design, technology, product quality and development of multi-function vehicles."

VW considers setting up commercial vehicles venture in China
 
A very informative Chinese article. It's long and in Chinese so I'll just summarize some points that I found interesting
划重点 | 欧阳明高院士解析动力电池技术进展与趋势,2020年要产业化的300Wh/kg的电池已取得实质性突破

Background: this article is based on sort of an interview with a top Chinese academic on vehicles who also works with a coalition of Chiense auto industry. In addition, he represents the expert group in charge of advising China's current 5 year plan (current one is 2016 to 2020) on new energy vehicle development. So I do place a lot of weight on his words and think they can be inferred to what China wants and largely will achieve by the end of 2020.

1. China's target is to achieve 300 Wh/kg and about $120/kWh for battery cells in 2020. Both achieved by Tesla no later than 2016. Currently Chinese battery manufacturers can do 230 Wh/kg on cells and 150 on packs with some lab result getting 300 but needs time to mass produce.
2. Goal is to get 400 on cell on mass production in 2025. University research labs have done it so theoretically possible.
3. China is moving NMC from 1 1 1 to 3 1 1 and pushing to 8 1 1.
4. In terms of solid state, he doesn't think feasible industrial application coming soon but optimistic it will be in mass production in 2030
5. He places high emphasis on whole car design and manufacturing on getting high efficiency, i.e., low Wh/km. He thinks this is a field few people have a lot of experience with and vital to improve.
 
Chinese tycoon buys 10% of Daimler
The Chinese businessman who owns the Geely automotive group has acquired a US$9-billion stake in Daimler, the German maker of Mercedes-Benz cars and trucks. The investment by Li Shufu, which Daimler confirmed on Friday in a regulatory filing in Germany, represents 9.69% of the company.

Last year, Geely Holding bought a 51% stake in Lotus, the British sports car maker. It also owns the company that makes London’s well-known black taxi cabs. With Li’s backing, Volvo recently outlined plans to create a brand of upscale electric cars, called Polestar, that is intended to compete with Tesla.

In the Chinese market, Geely Auto has become a top-selling brand. It sold more than 1 million vehicles last year. Geely Holding has also started an automotive brand, Lynk & Co, aimed at wealthier buyers.

Ferdinand Dudenhoffer, a professor who runs an automotive research centre at the University of Duisburg-Essen, said many people in Germany were cautious about investments by Chinese companies. “They need China — however, they also fear it,” he said in an email. He added that Geely could give Daimler an important partner. “With Mr Li and Geely, Daimler has open access to the largest market of the world,” he said. Daimler and other automakers are scrambling to develop electric vehicles to comply with increasingly stringent emissions standards that will take effect in China and Europe in the coming years. Daimler is working on both electric cars and battery-powered trucks.

Chinese tycoon buys 10% of Daimler
 
^A followup to the above,
Volvo kicks the chairman
Nomination Committee no longer proposes reallocation of Håkan Samuelsson after Geelys Daimler business.
"The reason why Håkan Samuelsson is not proposed for re-election is the announcement that Geely Group enters into the largest shareholder of German vehicle manufacturer Daimler, one of the Volvo Group's biggest competitors. Volvo Car Group where Håkan Samuelsson is CEO is a subsidiary of Zheijang Geely Holding Group whose main shareholder is Li Shufu ", the election committee writes in a press release.
 
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BYD down on reduced state aid
The Chinese vehicle manufacturer BYD fell sharply after the company lowered profit forecasts due to reduced state aid. It reports the Financial Times.

The stock fell as much as 10 percent to three-month-long. During Tuesday, in conjunction with the financial statements, BYD said that profit during the first quarter would be lower than the corresponding period last year, within a range of 75 to 92 percent of last year's profit, due to reduced subsidies for electric cars. By 2017, BYD sold 110,000 electric cars, an increase of 15 percent, according to the Financial Times.

Geely also warned that domestic competition will probably be tougher and that the removal of certain tax cuts may have a certain negative effect on passenger cars in China during the early part of the year.

source
 
Remember Mercedes S class sells for $230-$430k in China.

While Model S starts at $103k, don’t forget Musk’s fair pricing policy in China, which was received very well by markets in 2014. He could theoretically charge more if he wanted to. Here’s the 2014 article, exchange rates are different in 2014 vs now;

Tesla Model S 85 kWh "Fairly Priced" From $121,000 In China

Tesla can, and should charge more in China if they wanted to. An extra 25% is about $130k, still way less expensive than the Mercedes flagship pricing of $230-430K.

It’s doubtful that shorters know this information.
 
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Reactions: techmaven
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Last week, I visited Macau (the gambling capital, "Las Vegas" of China). I was surprised to see Tesla ads (paid for by Las Vegas Sands, not by Tesla) plastered all over the Venetian Macao, the Parisian Macao, the shopping mall, and on hotel buses and ferries. The ads are for a prize draw to win a free Tesla for everyone who follows their WeChat account. There is also a Model X on display at the main entry to the casino at the Parisian Macao, which is LVS' newest casino. The Venetian Macao is billed as the largest casino in the world. These properties draw thousands of wealthy visitors from all over China. It is quite noteworthy that they chose to feature Tesla for their prize draw.