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Blog Musk Says China Factory Announcement Coming Soon

Discussion in 'Tesla, Inc.' started by TMC Staff, May 3, 2018.

  1. Uncle Paul

    Uncle Paul Well-Known Member

    Nov 1, 2013
    Canyon Lake,CA
    Only makes sense to manufacture your vehiles in/near the customers.

    Political issues are much less, import duties make you more competitive and you may better understand your market.

    Most new auto makers consider the cultural differences between different regions. US, Middle Eastern, Asian, developing countries etc, all benefit from making cars for their regional markets.

    Tesla's plan of continous improvement will give them a leg up on their competition. OTA updates and two way communications with the end user gives them a treasure trove of continous feedback on how their vehicles are used, and what changes they may be able to make to gain additional customers.

    Asia has much lower labor rates and overhead. Land is cheaper, environmental burdens less, and fewer governmental and labor regulations allow for a more effecient operation.

    Tesla wants to thrive in a world wide economy.
  2. ricebucket

    ricebucket Member

    Feb 17, 2017
    What you're saying about quality is simply not true. You're at least a decade out of date in your perspective. In many sectors, China has the best manufacturing in the world today. For example, if you want to build a complicated piece of electronics like the iPhone, you go to China, period. No one in the US can make anywhere close to what the best Chinese ODMs can turn out. The factories and workforce and supply chain as a whole just doesn't exist elsewhere. It's not just about cost --- manufacturing in China has not been just about low labor costs for a long long time. (The manufacturing that *is* about cheap labor are no longer in China. Chinese wages are generally too high nowadays.) And it's even more lopsided if you account for the price --- even if these factories did exist in the US, you wouldn't get the same quality for the same price, because not all of the pieces are in place.

    As for IP, there's probably greater risk for industrial espionage or theft in China than in the US. But the math is much more complicated than you suggest. For example:
    - you're always at risk of IP theft, regardless of where you are. This is true even among the best of American companies (e.g. Waymo vs Uber, Microsoft vs Oracle). Staying in the US doesn't protect you from foreign theft either. Foreign companies can take still spy on you, and they can hire away your experienced employees.
    - you hurt your foreign businesses by not locating overseas. There can be many reasons for this, but I don't want to digress. In the case of China and Tesla, you are at a disadvantage in the largest car market in the world. Larger than both US and Europe combined.
    - hiding domestically may delay foreign competitors from catching up in the short term, but in the long term, this will cause you to lose competitiveness. "The Galapagos Effect." See Japanese cell phone makers for a recent example. You can't assume the rest of the world is static. The same argument applies to tariffs as well by the way.
    Your xenophobia is clouding your judgment here. The companies that do work in China are not dumber than you. They're sophisticated multinationals with far better insights into their businesses than you can imagine. And they choose to be in China despite the reasons you mention, because it actually makes a lot of sense. Expanding overseas increases risk, but the rewards are also much greater. You can't have your cake and eat it too.
    • Informative x 1
  3. windowtintpro

    windowtintpro New Member

    May 13, 2018
    Houston, TX 77022
    Excellent news for Tesla that they are building their factory in China for the following reasons:
    1. China is the largest Car market in the world & growing faster each year.
    2. China charges about a 25% tariff / duty on any imported car.
    3. China is the most important car market in the world.
    4. Competition in EV market is fierce in China; they need to win there.
    5. Plenty of Teslas have been bought in China, I'm sure they have taken them apart piece by piece.
  4. nagami

    nagami New Member

    Apr 22, 2018
    nice article[​IMG]
  5. Brando

    Brando Active Member

    Sep 27, 2016
    Bainbridge Island, WA
    #25 Brando, May 18, 2018
    Last edited: May 18, 2018
    Speaking of patents - only seem to help large corporations, limit competition and innovation, generally hurt our economy.
    (it does help earnings of lawyers, no doubt)

    Here is one very informative source - do your internet search and pick your topic/venue of interest and learn about patents.
    American intellectual property lawyer, author

    Stephan Kinsella

    And for copyrights research
    Lawrence Lessig

    might check TED Talks for Lessig has a fine style of presentations - surprised more people don't copy.

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