Tesla has been working on opening their factory in China, but the agreement hasn’t been finalized. The company has been working for months with the Shanghai’s Government to talk about assembling cars in China but is in a stand still due to disagreement on the ownership structure for the factory system.
China’s government says that the plant must be a joint venture with the local companies of the country. But Tesla wants to own the factory on it’s own. The disagreement in the project doesn’t mean that the deal will not happen in future. Tesla is selling cars in China. The model X of Tesla was shipped to China and costed about 835,000 yuan. But selling the cars in China also adds on a tax of 25 percent catapults the original price which might make the customers to think on buying the car. There are cheaper models like BAIC Motor Corp., Warren Buffett-backed BYD Co., that also provide cars of the same model as that of Tesla.
The company said that the local companies should “ensure affordability for the markets they serve.” “Tesla has no strategic path,” said Yale Zhang, managing director of company Automotive Foresight. “It has the halo of Elon Musk, and its products are slightly ahead of the competitors, but the others—especially the Chinese EV startups—are catching up rapidly.”
Tesla is known to have 31 retail stores in China. It also has 1000 superchargers that can charge the car in 30 minutes. “I am very into Tesla for its battery technologies, but I can only afford a Tesla if its price falls below 300,000 yuan,” Li, customer willing to buy a Tesla car said. “It will take years before that happens, so I had to make do with a domestic EV.”
“It’s going to be a much narrower lane for Tesla,” said Bill Russo, CEO of Automobility Ltd. “If you are double the price of the competition, then you are always going to be struggling.”