Tesla’s Big Red Opportunity: China’s EV Market 3× Bigger Than US EV Market (Video)
Tesla CEO Elon Musk highlighted on the Tesla shareholder call tonight that Tesla is the first non-Chinese automaker that has been permitted to build a wholly owned factory of its own in China. No doubt about it, Tesla knows the opportunity in China is enormous and is grateful for that. The following repost from EVANNEX puts that into more context.
When Elon Musk was on hand for the launch of Tesla’s new Gigafactory in Shanghai, it was a groundbreaking occasion in more ways than one. The opportunity in China is enormous for Tesla. “China’s Association of Automobile Manufacturers (CAAM) reports that China sales of EVs grew 60% last year, reaching 1.26 million units,” reports Electronics Weekly. This means that China’s EV market is 3× bigger than the US EV market.
Trefor Moss elaborates in the Wall Street Journal: “Sales for electric vehicles in China are thriving, topping 1 million for the first time last year, helped by government subsidies and other favorable policies.”
With the launch of the company’s new Shanghai Gigafactory, “Tesla now faces a race to start local production to take advantage of robust demand for electric vehicles in the world’s biggest auto market…. [as] China is central to Tesla’s aim of graduating from niche startup to mainstream global automaker.”
“In China, Tesla has the opportunity to rev up, capitalizing on the government’s support for electric vehicles and well-to-do Chinese car-buyers who are captivated by Tesla’s technology and enamored of Mr. Musk’s entrepreneurial risk-taking,” explains Moss.
“It makes sense for Tesla to commit fully to becoming a leading EV brand in the world’s largest EV market,” says Bill Russo, chief executive of Shanghai-based consulting firm Automobility.
In addition, Tesla has a unique head-start. Moss reports, “Tesla was the first foreign automaker to take advantage of a recent rule change allowing foreigners to own their China business, instead of having to work with Chinese partners as previously required.” That said, Tesla still needs to face off against local competition. Can China’s EV companies really stack up against Tesla? We’ll soon find out.
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