According to electrek, Tesla doubled its revenue in China over the past year. The rise in sales last year is likely due to a sudden surge in demand for Model X, which is becoming highly popular in the country. This is a great achievement as the company faced some issues in their starting stages in China; but being a huge business prospect, the automaker didn’t want to give up on the electric car dream in China!
When we talk about the electric car scene in China, it’s inevitable to touch the subject of sustainability. The air quality in China hit an all-time low in the year 2017. The smog layers have become so thick and hazardous that it has affected 460 million of the Chinese population.
The World Health Organization guidelines a safe limit of 10 micrograms when it comes to pollution level. But China hit a whopping 1000 micrograms!
It is high time that China looks for ways to reduce pollution. Being the most populated country in the world, China has a tremendous amount of vehicles running on fossil fuels. Hence, China concentrated its efforts on the adoption of electric vehicles.
The Chinese government is already investing billions of dollars in promoting EVs. The government has already planned to install 800,000 charging points across the country soon. In 2016, the country registered 336,000 new electric vehicles as opposed to the meager number of 160,000 registrations in the USThis is where Tesla comes in with their electric cars. Until now, Tesla has made over 2 billion dollars. This is twice as they made in 2015.
But, the company isn’t just concentrating on selling more cars. The electric car manufacturer is keen on building more charging stations and service station all across China. The company has over 1,000 Superchargers and 2,000 destination chargers nationwide.
Tesla calls their cluster of charging stations “Supercharger stations.” The third supercharger in Beijing built by Tesla has 50 charging ports. These high voltage ports help in charging the batteries quickly than conventional charging ports. At present, the company imports its cars from California into China with an import tariff, which can be avoided if they manufacture the cars directly in China. To curb down the cost, Tesla has made their move on building a manufacturing plant in China. But the Chinese regulatory systems are a bit trickier than they seem. When a foreign manufacturer wants to sell cars in China, they can do it only in two ways:
They can, probably, do a joint partnership with a Chinese partner. The advantage of this arrangement is that they won’t have to pay a hefty fee as a tariff. The drawback is that the company will be then in a position where they will have to share their trade secrets with the partners.
This puts them in a situation where the hard researched technology will be up for the taking. The second method is tailored in such a fashion that the manufacturer can keep their secrets safe, but they will have to pay a hefty fee as a tariff.
As of present, Tesla has made a preliminary deal with Shanghai municipal government. The company will have sole ownership of the manufacturing plant but will have to pay the tariffs unless they negotiate an exemption.
Tesla hopes to clear everything up by the end of the year and start the production process in 2019.