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Tesla prices its Model S in China

  • Tesla Motors (TSLA) says it will price its premium Model S in China at 734K CNY ($121K).
  • The automaker says it priced the vehicle "much lower" than competitor models and at a fair level compared to the U.S. version. What's lost in translation is the added taxes and costs associated with selling in China.
  • Straight from the Tesla blog: "734k CNY is a big risk for Tesla. We know it's unconventional. We know we could charge more."
  • TSLA -0.4% premarket
Comments (34)
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    From Tesla PR: "We care about advancing the cause of electric cars in China"

     

    Comparisons for car pricing in China, a mainstream car price:

     

    Volkswagen Golf 1.4 (Or Equivalent New Car) 150,000.00 ¥

     

    http://bit.ly/1eUZ7yn

     

    The Model S is a car for the 1% in China imho. Nothing wrong with that, but I don't think TSLA can advance EV sales in meaningful numbers there.

     

    Most Chinese consumers can only afford cars from local-foreign JVs (companies such as Nissan and BMW are selling their EVs under different names in China) when shopping for an EV or PHEV.

     

    PS: Crumblings in Chinese Shadow Banking are starting, this would be watched by all high-end and luxury brands selling in China...
    23 Jan, 08:07 AM Reply Like
  • chickensevil
    , contributor
    Comments (639) | Send Message
     
    Yes, compare the Tesla with an out of country made car that in the UK costs 16k pounds. That makes perfect sense. Unless their pay is so off base that their 1% are the only ones with money, then I would suggest that the price seems fair. The car is not a mass market car. They are funding their company with the sales from this model, so the more sales they have the better it will be.

     

    Go tell me how much a Mercedes S, Audi A6, or BMW 6 series costs in China, and then we will compare.

     

    Is this a poor man's car? no. Is it a car for just the 1%... also, no.
    23 Jan, 08:24 AM Reply Like
  • chickensevil
    , contributor
    Comments (639) | Send Message
     
    Yeah, here you go: "for comparison, the BMW 650 has an $87K MSRP in the US, but costs around $326,000 in China."

     

    http://engt.co/1eV4JIU

     

    What you posted is just dishonest. I am glad they are NOT selling it to the 1%, like you are trying to claim. They are bound to get far more sales selling it at 120k than selling it for double/triple the price.
    23 Jan, 08:41 AM Reply Like
  • wandonye
    , contributor
    Comments (6) | Send Message
     
    1% maybe. But keep in mind how large the base number is. People in China was expecting the price of Model S to be 1600,000RMB+. With the current price, I see a huge market.
    23 Jan, 08:48 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    Dishonest? Read Tesla PR again.

     

    I clearly wrote the VW is a *mainstream* car to show what an average car costs in China, not comparing the two cars directly.

     

    It was about the statement of "advancing EVs".

     

    I don't see meaningful numbers at these prices.

     

    If anything is advancing EV and PHEVs until 2017 when TSLA will introduce their cheaper car (that's their plan at least), it's these companies:

     

    Denza (Mercedes-BYD)
    Venucia (Nissan-Dongfeng)
    Zinoro (BMW Brilliance)
    Toyota with PHEVs
    BYD with EVs
    ...

     

    These are EVs and PHEVs more people will be able to afford, the Model S (and X) is only for very rich people, i.e. a niche.
    23 Jan, 10:28 AM Reply Like
  • Tri Duong
    , contributor
    Comments (1454) | Send Message
     
    tftf,

     

    Again with your senseless unsupported highly biased opinions that you somehow turn into magic facts.

     

    Volks Golf 1.4 is a very cheap car. If that was for sale in the US, it would be in the teens. That tells you China's insane tax pretty will more than double the price of any imported vehicle.

     

    The top 1%, or should I say 2% in China buys millions of imported BMW, Benz, Jags, Rolls Royce, Lambo, Ferrari, Buick, etc... for much higher than 734k a piece. Let me remind you that China is very ProEV and the Tesla Model S outperforms most of those vehicles.

     

    Let me also remind you that Tesla's soft launch with no advertisement also produced more reservations than any other country so far.

     

    Let me also remind you that Tesla is hovering around $180, a complete opposite of what you "predicted" a couple months ago.
    23 Jan, 10:28 AM Reply Like
  • chickensevil
    , contributor
    Comments (639) | Send Message
     
    Yeah, they aren't getting high volume with those cars because they suck (let's be honest here). You want to talk about filling a niche... sure the car might be affordable... but you almost have to cater to the wealthy to get anything done.

     

    Given that there is no major parking lot chargers, there is no chargers at stores, at work, or wherever else you would look to go. You need to target an audience most likely to:
    1: own their own house
    2: have enough range to get from their house to wherever they would want to go and back again
    3: have enough luxury to it, in order to cater to their more expensive taste.

     

    When you create the market, then other companies will step in to help build out further charging infrastructure, which will open the market up to allow for easier time selling a lower market car.

     

    You need a road to be built for this new fangled thing they are calling an "automobile" or "horseless carriage", but there are so few of these things out there, so who is going to spend the money building decent roads?
    23 Jan, 10:54 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    tduong11 wrote: "Let me also remind you that Tesla is hovering around $180, a complete opposite of what you "predicted" a couple months ago. "

     

    I predicted what? Please read what I wrote a few weeks ago:

     

    "A TSLA share price $45-75 still looks reasonable to me today, in an euphoria/momentum market TSLA can go to $200 again short-term."

     

    http://bit.ly/1mxbfIz

     

    My *personal*, long-term PT for TSLA remains $50-75 and has been the same for months (until facts change), but I'm not the market. Short-term trading doesn't interest me a lot.

     

    I wrote above (link provided) that TSLA can go back to $200 short-term. It's almost there. Maybe it will even go higher. Who knows? Stock-markets in general are at all time-highs and TSLA rides on momentum.

     

    I have NO position in TSLA at the moment, closed my last short for a profit.

     

    But I will look into a new short position should TSLA cross $200 or hover there.

     

    Let's await earnings with more data (maybe also on the battery factory?) and the stock reaction.
    23 Jan, 11:09 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3251) | Send Message
     
    Your comment makes no sense.

     

    First you ratify that Tesla Model S will be priced much less than comparable cars by providing the price of a Golf, which is not comparable, but is priced higher, according to the figure that you provided.

     

    Then you state your opinion that Model S is for the 1% and cannot "advance EV sales in meaningful numbers there", without any reason or support for such an opinion and in direct contradiction to the evidence that you yourself have provided.

     

    Your credibility is laughable.
    23 Jan, 02:54 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    Maybe you know the concept of "purchase power"?

     

    My example with the VW Golf and other Chinese prices (follow the link) simply was to show what an average car costs in China.

     

    Yes, the model S (and X) will sell in China, but only to a small niche.

     

    It remains to be seen how big that niche is for TSLA - many Chinese high-end/luxury buyers prefer traditional brands with a long history (BMW, Merc, Jaguar, Bentley... etc. even Cadillac is big there).
    23 Jan, 03:20 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    "providing the price of a Golf, which is not comparable, but is priced higher, according to the figure that you provided"

     

    Since when is 150k CNY more than 734k CNY ?

     

    I didn't compare the two cars directly, I was just pointing out you can get 5 mainstream cars with a foreign badge (and VW has a good brand repuation in China) for the base price of one Model S.

     

    The Model S and X will be selling to a small niche.

     

    PS: In other news, a sharp correction may be coming in China soon for all foreign high-end brands (fighting corruption and showing off less luxury demanded by new leaderhsip. Credit, shadow banking implosions likely...watch the news later in 2014).
    24 Jan, 06:26 AM Reply Like
  • a alto
    , contributor
    Comments (126) | Send Message
     
    Gee , let's see if this price receives the same treatment as Apples I phones have in the China market .
    23 Jan, 08:22 AM Reply Like
  • stockahead
    , contributor
    Comments (44) | Send Message
     
    the 1% in China, how you described it, is a huge number. I honestly hope this will be happen.
    However, what do you think what's the size of the potential client base when the much more cheaper Model E starts sellling?
    23 Jan, 08:27 AM Reply Like
  • Mostapasta
    , contributor
    Comments (24) | Send Message
     
    Google search brings up,"
    The research shows that the luxury cars cost much less in Seattle and Hong Kong. The details are below:
    Mercedes S350: $93,000 (569,372 yuan) in Seattle, HK$1.2 million (947,149 yuan) in Hong Kong, and 1.39 million yuan in Beijing;
    Audi A8 2013: $86,095 (527,091 yuan) in Seattle, HK$1.1 million (868,180 yuan) in Hong Kong, and 1.36 million yuan in Beijing;
    BMW X6: $59,461 (364,033 yuan) in Seattle, HK$930,000 (734,007 yuan) in Hong Kong, 1.06 million yuan in Beijing.
    Peopledaily.com.cn also found that the 1.6 million yuan Mercedes GL450 4 Matic is nearly five times more expensive than in the US, where it sells for $58,200 (356,220 yuan)."

     

    http://bit.ly/1dRAAxA
    23 Jan, 08:30 AM Reply Like
  • chickensevil
    , contributor
    Comments (639) | Send Message
     
    What is interresting from this article, even cars MADE IN CHINA seem to be sold at a higher value than you would find elsewhere... That is just terrible. I think if they can combat the negative FUD that will surely be spread around that will suggest that the car is cheaper because it is a cheap car, we will see some very good business in China. Hopefully, like in America and other places, word of mouth will help to sell this car far more than anything else. Because they are going to need consumers to help keep things straight from the FUD that is likely to be spread around by other manufacturers.

     

    "The Audi Q5 2.0 TFSI, imported to the US, is priced at $37,300 (228,267 yuan). The China-made Audi Q5 2.0T has a suggested retail price of 383,600 yuan on the Chinese mainland. Buyers actually pay more because of dealer mark-up from the suggested price."
    23 Jan, 08:53 AM Reply Like
  • pintuwang
    , contributor
    Comments (6) | Send Message
     
    1% in China is 10million people.
    23 Jan, 08:47 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    "for the 1%" was a popular saying I used, not an exact number.

     

    My main statement was about Tesla PR that this will advance EVs in China. At these prices this doesn't look possible to do anything about the pollution caused by personal transport. It's a drop in the bucket until 2017 where TSLA may introduce a cheaper car.

     

    If one is serious about EVs for the growing middle class in China, look at these three JVs used for new EV brands:

     

    Denza (Mercedes-BYD)
    Venucia (Nissan-Dongfeng)
    Zinoro (BMW Brilliance)
    ...

     

    But even these aren't selling that great in pre-orders so far.

     

    The EV pickup rate in China remains to be seen...and if there are draconian measures by the government, I see these cheaper cars profit the most.
    23 Jan, 10:19 AM Reply Like
  • seeker34567
    , contributor
    Comments (179) | Send Message
     
    Correct pintu! The naysayers would have us believe that Tesla are cars for the rich. What they are not telling us is this ingenious way of upstarting this company is to sell to the rich and then working itself down to the middle class.
    23 Jan, 10:51 AM Reply Like
  • chickensevil
    , contributor
    Comments (639) | Send Message
     
    "Correct pintu! The naysayers would have us believe that Tesla are cars for the rich. What they are not telling us is this ingenious way of upstarting this company is to sell to the rich and then working itself down to the middle class."

     

    This isn't really anything new... I don't know why this is a shock to these people. Look at just about any other new and revolutionary technology. When you want to upset the market on a brand new and expensive product, you target those with the wallet to buy it. Computers, TV's, Microwave Ovens, even "Horseless Carriages".
    23 Jan, 10:57 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3251) | Send Message
     
    It's relatively rare in automobiles, though. Expensive brands of cars don't usually move downmarket very much. Instead, they tend to get bought out by downmarket brands like VW and remain captive premium brands thereafter. Or they go out of business, like Duesenberg and Packard.
    23 Jan, 02:47 PM Reply Like
  • www2280
    , contributor
    Comments (506) | Send Message
     
    Folks in China said this Tesla base price for China is much less than they assumed, so I guess Tesla might do well here.
    23 Jan, 10:06 AM Reply Like
  • seeker34567
    , contributor
    Comments (179) | Send Message
     
    www, sell them low to get them addicted to it.
    23 Jan, 10:53 AM Reply Like
  • surferbroadband
    , contributor
    Comments (954) | Send Message
     
    I get the feeling that when the first comment is negative on Tesla, then everyone jumps on that commenter. When the comment is positive, everyone is quiet.

     

    Probably because the negative comments are wrong.
    23 Jan, 12:11 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    That's a contrarian. People warning of bubbles never have been popular while the party is on and everything makes easy money (or thinks so).
    23 Jan, 03:24 PM Reply Like
  • John Bingham
    , contributor
    Comments (805) | Send Message
     
    tftf,

     

    Will you still be telling us that TSLA is a bubble and ready to burst in another few years when they are selling cars in the 100,000s and heading towards a million per annum?

     

    Just interested.....
    24 Jan, 05:21 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (4107) | Send Message
     
    They won't do a million cars even in an absolute best-case scenario before 2020-2023 or so (because of battery supply restrictions).

     

    Even then, the stock price is richly valued factoring in risks (how likely is this scenario over 10 years?) and discounting to present value.

     

    I would call it a bubble in most other scenarios.

     

    PS: But I don't want to single out TSLA. Look at stocks like TWTR, VJET etc., there are many bubbles brewing at the moment in my opinion.
    24 Jan, 06:34 AM Reply Like
  • John Bingham
    , contributor
    Comments (805) | Send Message
     
    Thanks for the reply tftf,

     

    At least you now admit that it could be possible for Tesla to hit that magic million mark.

     

    I agree that it is a very difficult task for what is essentially a start-up to go against the "big boys", but Tesla have shown us that they mean business, and so far they have delivered on their promises.

     

    I'm long from early on because I saw the strong potential in the company, and I admit that the volatility of the stock, and the wild highs, have sometimes made me a little worried. That huge climb less than a year ago looked very bubble-like, but this roller-coaster ride will calm down and be more realistically valued as Tesla continue to grow.

     

    TSLA will still be blown about by the winds of media, but I expect that as the 100,000 cars per year mark is met (probably 2016 or 2017) the price will be much more stable and still growing, but at a rate somewhat less than the production growth rate.

     

    By then we should have a very clear picture of when the million cars a year mark will be passed. I think they could well do it early in your "absolute best-case scenario" 2020 - 2023 time frame.

     

    See you there and happy trading!
    25 Jan, 05:47 AM Reply Like
  • Cassina Tarsia
    , contributor
    Comments (641) | Send Message
     
    Anyone know what Tesla did about the Trademark issue that was holding up sales for so long? Did they pay the price for the site or did they make a new site on their own? Does anyone know about this ... from what I can see the Tesla name is in English, not in Chinese as it was originally planned. Or am I wrong here ...?
    23 Jan, 01:04 PM Reply Like
  • surferbroadband
    , contributor
    Comments (954) | Send Message
     
    Good question Cassina. I would like to know that too.
    23 Jan, 01:41 PM Reply Like
  • Cassina Tarsia
    , contributor
    Comments (641) | Send Message
     
    Here is what we have been wanting to hear ... Tesla has won the right to use its name in China - they just won the right through a decision in a Chinese court! So ... Tesla, it is! Hurray for Tesla and Elon Musk!!! Here is the link from a Green Car Report article that just came out ... http://bit.ly/19SEDst
    24 Jan, 02:18 PM Reply Like
  • Magical Alpha
    , contributor
    Comments (7) | Send Message
     
    That's really cheap, compared to other Imports, especially it has no partnership with one of the local auto manufacturer.
    23 Jan, 02:43 PM Reply Like
  • surferbroadband
    , contributor
    Comments (954) | Send Message
     
    Cheap. And what is the main thing that sells a product? Price.

     

    No need to advertise. Everyone knows the product exists.
    23 Jan, 03:19 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1322) | Send Message
     
    Vehicle prices here in New Zealand are also twice as high as the US market across the board.
    USA price for BMW 320i starts at $32k USD
    NZ price for BMW 320i starts at $74k NZD ($63k in USD)
    Its pathetic and 100% down to the greed of the local dealers.
    There is no way that shipping and the 15% gst should double the price.
    Its an absolute crime that almost every market outside of the major North American and European markets know nothing about.
    Smaller markets get fleeced to support lower prices and higher volume in the larger markets. Its the way its always been in the car industry.

     

    Until Tesla...with their commitment to only make their 25% margin regardless of the market (after shipping and local import taxes) they will allow many people in smaller markets to finally give the boot to the greedy auto dealers around the world.
    Here in NZ a similarly performing BMW M5 starts at $211,000 NZD!
    I expect a Tesla to cost no more than $135,000 NZD.

     

    Obviously still not a cheap car but to be able to finally get a decent car without lining the pockets of a greasy dealer will be something many MANY people will find attractive across the globe.

     

    Cant wait to put those hucksters out of business!
    23 Jan, 03:21 PM Reply Like
  • surferbroadband
    , contributor
    Comments (954) | Send Message
     
    @teddyg101.

     

    Thank you for your insight. I was not aware that the pricing of autos outside North American and Europe was so high. I thought only China was a problem. I was wrong.

     

    Of course, Elon is originally from South Africa and I am sure the auto dealers there are fleecing customers.

     

    It is a breath of fresh air that someone comes in and turns the auto industry upside down. And the internet is only helping the process. If you want to help the process, then please contact Tesla Motors about opening a store in New Zealand.
    23 Jan, 04:45 PM Reply Like
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