Tesla In China. How Tough It Would Be For Local Players To Compete ?

As Tesla and Nio would begin rolling out electric cars in next of couple of months, CFO of Chinese electric car startup Nio, Louis Hsieh takes outlook on the current market scenario.

Tesla In China

Tesla took a decision to manufacture its electric vehicles in the competitive and the largest market in the world, China. However, its competitors do not seem much bothered about its presence. They are geared up for the challenge from the U.S. carmaker.

China has always perceived as an alluring market for electric car manufacturers across the world owing to the vast number of potential consumers. Many major manufacturers are setting up their goals to electric vehicles in next five to seven years in the country. Tesla is no exception. It took a decision to establish manufacturing factory in the country in 2017.

Louis Hsieh, CFO of Chinese electric vehicle startup Nio, expressed that his company is ready to take up the challenge from the Elon Musk’s firm. Commenting on its decision to set up a factory there, he said, it is a right decision to reduce construction and delivery cost.

Responding to question on whether Tesla could become a threat, Hsieh said, China is a competitive market and Tesla needs to treat it as the biggest market in the world. He admitted it is the threat to them, but they are all geared up for the challenge.

As Nio is a Chinese company, it has a government support over Tesla. Nio got a subsidy of nearly $48,000 Chinese yuan ($7,380) per car from the government. However, Tesla has been seeking subsidies, but Hsieh predicted that it will not qualify.

Major car manufacturers such as Volkswagen, BMW, Mercedes, and others have announced their entries in the Chinese market. Those companies would become threat to local players by 2019 or 2020. Every major player has announced plans, but only Tesla and Nio would launch its cars by next couple of months.

Byton, another Chinese start-up, has announced its plans to enter the market. Though it has announced it would begin rolling out cars by 2019, Hsieh believes its launch will be delayed.

The Chinese market is more favorable to local players as compared to other players owing to government support. But the threat remains to grab the major share.


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