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China Market situation and outlook

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I am not 100% sure if its correct but from what i heard its pretty hard to penetrate Korea market, the homologation, you also need a local partner to sell (a problem for Tesla model), again these are all soft barrier not official ones, also i think a vehicle must qualify for the EV incentives, i remember BMW boasted about getting i3 qualified due to investments and R&D in Korea, Renault Nissan have a stake in Samsung Motors.

So i may be wrong but things are much more tricky then just opening a store in Seoul and selling 100 cars a month, Tesla would have entered the market long time ago otherwise, they now even open a store in Finland
 
"could be possible" makes no statement whether or not it will happen.

Also we got confirmation as why China has surplus inventory (Bloomberg/JL Warren estimates 1,600 cars):

Originally Posted by Elon Musk China is the only place on Earth that we have excess inventory. We are essentially selling cars that speculators ordered but we are not able to take delivery on

Should that have read "were not able"?
 
I am not 100% sure if its correct but from what i heard its pretty hard to penetrate Korea market, the homologation, you also need a local partner to sell (a problem for Tesla model), again these are all soft barrier not official ones, also i think a vehicle must qualify for the EV incentives, i remember BMW boasted about getting i3 qualified due to investments and R&D in Korea, Renault Nissan have a stake in Samsung Motors.

So i may be wrong but things are much more tricky then just opening a store in Seoul and selling 100 cars a month, Tesla would have entered the market long time ago otherwise, they now even open a store in Finland

Yeah I think it's the requirement of needing a local partner to sell in Korea. Homologation is not an issue in Korea since Korea has FTA agreements with the EU and the US, so any car that is legal in the EU or the States is allowed in Korea (you can get anything from a small diesel Citreon or Peugeot to American muscle cars like a corvette or camaro, even pick up trucks and escalades in Korea).
 
Tesla Motors founder Elon Musk says to 'localise' China output: Report - The Economic Times
This article states more clearly that Tesla does have plans to localize production in China over the next three years.
"We have a strong long-term commitment to China and we [in]tend to establish both local production and local engineering in China," he said in an interview with the official Xinhua news agency.

Why would Musk be emphatic about "local engineering"? Any ideas what engineering in China would do?
 
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Woah, hyperbole check needed. They've only been selling the Model S for a couple of years. European sales were slower than hoped (Germany), but that hasn't stopped the roll out elsewhere.


Tesla is doing very well in Hong Kong. Last time I checked, HK is mostly Chinese , not German or Korean .
The speculative orders coupled with model change messed them up. Now with charging assistance and
the more advanced car they will do fine eventually.
 
I don't think making cars in China is a good idea. To penetrate into the market and make cars just for China is OK, but anything more than that is I believe too early both for Tesla and China.

Tesla has made insane decisions before, like deciding to exist, and they succeeded most likely beyond their dreams. Such success perhaps blinded them a bit that they could do the impossible again, against all odds, in penetrating Chinese market early on in their growth and in building cars in China soon.

The prospect of Chinese built Tesla scares me, due to my consistent experience of poor Chinese-made machinery quality and performance. The wrath of people that have to deal with consequences of these failures has imprinted a law in my head: no Chinese-made machinery will be purchased under my watch, until they improve the quality. That is not likely to happen in a few years.

I just hope that Tesla decision-makers first buy some (any) equipment made in China and test its quality and performance first hand before making a decision on a Chinese manufacture.

Tesla business seems to have great innovation capabilities, but may need to strengthen other business capabilities that are relying on different skills other than innovation.
 
Apple outsources all iphone/ipad manufacturing to China. So don't use a leaf to blind your eyes.

The prospect of Chinese built Tesla scares me, due to my consistent experience of poor Chinese-made machinery quality and performance. The wrath of people that have to deal with consequences of these failures has imprinted a law in my head: no Chinese-made machinery will be purchased under my watch, until they improve the quality. That is not likely to happen in a few years.
 
Apple outsources all iphone/ipad manufacturing to China. So don't use a leaf to blind your eyes.

I am on my fourth iphone unit, all 3 replacements a result of hardware issues. I was not charged for any replacements despite phone being out of warranty.
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Apple can get away with hardware problems, they simply replace a faulty phone with a refurbished unit.

My Mac charging cable failed just after a warranty period expired, so I had to pay through my nose for the new one. That made me really unhappy with Apple. If they charge exuberant prices for their products, these products should be of adequate quality. I complained about that, but Apple ignored my complaint because they can.

What can possibly cause charging cable to fail? That cable can not be kinked, as Apple cables are well designed, kinking is not happening. I hardly use that computer, once a month, so cable is used rarely. Charging cable should last much longer than 2 years.
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My experience with poor quality machinery made in China involves having to cop face to face the wrath of people that are put at risk of injury and that have to deal with failure consequences usually due to a small component in a complex piece failing and causing a lot of trouble for them. That trouble is not worth the savings in initial cost.
 
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I am not 100% sure if its correct but from what i heard its pretty hard to penetrate Korea market, the homologation, you also need a local partner to sell (a problem for Tesla model), again these are all soft barrier not official ones, also i think a vehicle must qualify for the EV incentives, i remember BMW boasted about getting i3 qualified due to investments and R&D in Korea, Renault Nissan have a stake in Samsung Motors.

So i may be wrong but things are much more tricky then just opening a store in Seoul and selling 100 cars a month, Tesla would have entered the market long time ago otherwise, they now even open a store in Finland

you know all those reasons tesla is falling on its head in Germany? well korea n japan is kinda like that.

1- tiny ass roads = no bueno for large cars
2- govt supports domestic makers
3- everyone, and i mean everyone, lives in apartments, or the like. No garages with dryer plug outlets there, my friends.
4- really really good public transport.

add to that the notorious nationalism of Koreans (something that Japanese and Germ.s lack, relatively speaking)

Tesla has made insane decisions before, like deciding to exist, and they succeeded most likely beyond their dreams. Such success perhaps blinded them a bit that they could do the impossible again, against all odds, in penetrating Chinese market early on in their growth and in building cars in China soon.

The prospect of Chinese built Tesla scares me, due to my consistent experience of poor Chinese-made machinery quality and performance. The wrath of people that have to deal with consequences of these failures has imprinted a law in my head: no Chinese-made machinery will be purchased under my watch, until they improve the quality. That is not likely to happen in a few years.

I just hope that Tesla decision-makers first buy some (any) equipment made in China and test its quality and performance first hand before making a decision on a Chinese manufacture.

Tesla business seems to have great innovation capabilities, but may need to strengthen other business capabilities that are relying on different skills other than innovation.

yep i agree. After all, our GMs and Chryslers are made in China.

So are Takata airbags.


******
all that said, i do agree with tesla's decision to go after china and secondarily japan first. But it's clear they were waayyy optimistic.

I have no explanation for HK success, other than HK's penchant for being more knowledgeable about western tech. Or a phenomenal local sales team? I honestly dunno.
 
Problem with selling to asia is that the Model S is too big. Roads are smaller, cars are smaller and you can't really drive faster than 50km/hour due to the constant traffic.

That plus the hundreds of scratches you'll get from your car body on the first year alone. A Model S will not look great.

Maybe if Model S shows up as a final boss in a "need for speed" movie against a lighter asian car that drifts. It might persuade people.
 
Problem with selling to asia is that the Model S is too big. Roads are smaller, cars are smaller and you can't really drive faster than 50km/hour due to the constant traffic.

That plus the hundreds of scratches you'll get from your car body on the first year alone. A Model S will not look great.

Maybe if Model S shows up as a final boss in a "need for speed" movie against a lighter asian car that drifts. It might persuade people.

Totally disagree, bmw Mercedes jaguar Audi and many others sell similar sized cars in Europe.The tesla is perfect for worldwide sales. It way more efficient in traffic as well.
 
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