From the start, Tesla has shirked the traditional automotive model of spending millions of dollars on advertising based on the belief that simply developing products that are better in every way will eventually lead to sales. In the US, Tesla rolled funds into one referral program after another to nudge word-of-mouth sales, ultimately culminating in a contest that saw scores of online social media influencers earning a next-generation Roadster, valued at $250,000, or even two for some of them, simply for making a few (several dozen) referrals.
Across the Pacific in China, Tesla is singing a very different tune as it continues to ramp up efforts to stoke sales. It is hosting exclusive track events for owners, parties at its showrooms, and even a custom line of Chinese Tesla stickers for popular social media apps, according to Reuters.
To date, Tesla has held three trackside events at its driving school in China — for the media, influencers, and a handful of lucky owners in August.
The Beijing and Shanghai events are just the first of many, according to the head of the company’s China driving school, Leo Liu. He expects Tesla to run similar events in Guangzhou and Chengdu as the company works to build excitement for its vehicles in advance of the sale of the first Made in China Tesla Model 3s later this year.
Tesla clearly sees China as a critical piece of its sales. Indeed, the Model 3 is already sending company revenues from China to new heights. Chinese revenue climbed 42% to $1.5 billion in the first half of 2019, amounting to 13.5% of total company revenue.
News just broke today that the Chinese government, announced by the Ministry of Industry and Information Technology, is going to exempt Tesla from purchases taxes even while the country ramps up tariffs on US-imported autos (which is yet another response to the ongoing Trump trade war).
Tesla sees the growing middle class as a lucrative new market in China, and early Model 3 sales confirm the company’s decision to build its first automotive factory outside the United States in Shanghai, China. Musk recently toured the new Shanghai Factory, dubbed Gigafactory 3, after flying to Shanghai for a “debate” with famed Alibaba CEO Jack Ma at an AI conference.
The discussion flopped around like a dead fish while on stage, but Musk made good use of his time in China, holding numerous meetings with Gigafactory 3 employees, government transportation officials, and, of course, some local bao (steamed buns).
— Elon Musk (@elonmusk) August 30, 2019
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