Tesla Motors, like any business, needs markets in which to sell its product, but if those markets are too far away, it could generate problems.
For now, all of Tesla Motors‘ production is in the United States. Even in the States, there are some areas where it is difficult to buy a Tesla Model S, such as in Texas, where Tesla Motors is not allowed to sell its vehicles directly to buyers. Texas buyers need to jump through hoops and make sacrifices in order to buy and take delivery of, even service, their Tesla Model S.
Tesla Motors hasn’t been popular only here in the US, but abroad as well, the best-selling electric vehicle in Canada, for instance, and the best-selling vehicle, of any kind, in Norway. Again, buyers must make sacrifices, buying from a company overseas, paying extra for import taxes and transportation. Still, production is still only in the US, but that may change with Tesla Motors’ expansion into China.
By the end of this year, Tesla Motors expects to have a dozen stores in China, with sales projections expected to be upwards of 1/3 of global sales. Starting at just over $120,000 for the Tesla Model S 85 kWh, price is competitive with other luxury performance vehicles, and there is a lot of interest. If sales are going to be in the numbers they’re expecting, around 16,000 vehicles per year, it would only make sense to start production in China.
If Tesla Motors starts production of the Tesla Model S, and future models, in China, then they’ll be able to eliminate import taxes and, possibly, take advantage of incentives for production of non-polluting vehicles. Tesla Motors CEO Elon Musk says the safety standards are some of the most rigorous in the world, and that Chinese officials seemed to be quite concerned about quality.
Elon Musk went on to say, “Long-term, there’s no question we’ll have a factory in China. There is an argument for having that be our first major factory outside the US.” Personally, I would have pinned a Tesla Motors factory somewhere in Europe as the first major Tesla Motors production outside of the US, but I guess sales projections aren’t as impressive as they’re expecting for economically-booming China.