Tesla has been going straight up since this headline hours ago: Tesla Motors: BofA/Merrill reiterating cautious stance on $TSLA; concerns over pricing in China - making NEW highs with the market down over a 1% and making new lows - SOLID Relative strength - Long $TSLA....Thanks for checking....Tim_K
Why Tesla's $121,000 Model S price in China makes business sense
Jan 23 at 12:25
By Jerry Hirsch, Los Angeles Times
Jan. 23--Tesla Motors said it would sell the big battery version of its
Model S electric sports sedan in China for about $121,000. While that's an
eye-popping number to American car shoppers, it actually represents a
restrained, strategic approach for the Palo Alto automaker.
The starting price of the Model S with the 85 kWh battery pack will be
$81,070 -- the same as in the U.S. About $36,000 in Chinese tariffs and
taxes, and another $4,000 to ship the car across the Pacific Ocean make up the
rest.
Tesla also sells a smaller, less expensive version in the U.S.. But the
big battery version gives the car a range of about 265 miles per charge and is
the automakers' more popular choice.
"This pricing structure is something of a risk for Tesla, but we want to
do the right thing for Chinese consumers," the company said in a statement
Thursday. "If we were to follow standard industry practice, we could get away
with charging twice as much for the Model S in China as we do in the U.S."
Chinese officials, however, have criticized foreign companies of gouging,
especially when it comes to luxury or lifestyle goods.
Mercedes-Benz, for example, prices its top cars at about double what they
sell for in the U.S.
"We want to treat our Chinese customers just as well as we'd treat
customers in any other country," Tesla said.
It also is smart business.
China is the biggest, and fastest growing, auto market in the world.
Car companies sold nearly 22 million vehicles in China last year, a 14%
gain, according to forecasting firm LMC Automotive. That compares with the U.S.,
the second best car market globally, where automakers sold 15.6 million
vehicles, a nearly 8% gain.
Tesla already is experiencing strong demand for its luxury electric car in
the U.S. and Europe, said Elaine Kwei, an analyst at Jefferies Group, the
investment house.
The automaker sold 22,450 cars last year, about 1,000 more than expected
as it ramped up manufacturing at its factory in Fremont, Calif.
"Although the company declined to break out international sales, we
estimate roughly 2,000-2,500 were delivered outside of the U.S.," Kwei said.
Tesla Chief Executive Elon Musk has said the company will launch sales of
its Model X, an electric SUV, later this year and plans a third-generation
electric car, which will start at about $35,000 within three years.
Jan 23 at 12:25
By Jerry Hirsch, Los Angeles Times
Jan. 23--Tesla Motors said it would sell the big battery version of its
Model S electric sports sedan in China for about $121,000. While that's an
eye-popping number to American car shoppers, it actually represents a
restrained, strategic approach for the Palo Alto automaker.
The starting price of the Model S with the 85 kWh battery pack will be
$81,070 -- the same as in the U.S. About $36,000 in Chinese tariffs and
taxes, and another $4,000 to ship the car across the Pacific Ocean make up the
rest.
Tesla also sells a smaller, less expensive version in the U.S.. But the
big battery version gives the car a range of about 265 miles per charge and is
the automakers' more popular choice.
"This pricing structure is something of a risk for Tesla, but we want to
do the right thing for Chinese consumers," the company said in a statement
Thursday. "If we were to follow standard industry practice, we could get away
with charging twice as much for the Model S in China as we do in the U.S."
Chinese officials, however, have criticized foreign companies of gouging,
especially when it comes to luxury or lifestyle goods.
Mercedes-Benz, for example, prices its top cars at about double what they
sell for in the U.S.
"We want to treat our Chinese customers just as well as we'd treat
customers in any other country," Tesla said.
It also is smart business.
China is the biggest, and fastest growing, auto market in the world.
Car companies sold nearly 22 million vehicles in China last year, a 14%
gain, according to forecasting firm LMC Automotive. That compares with the U.S.,
the second best car market globally, where automakers sold 15.6 million
vehicles, a nearly 8% gain.
Tesla already is experiencing strong demand for its luxury electric car in
the U.S. and Europe, said Elaine Kwei, an analyst at Jefferies Group, the
investment house.
The automaker sold 22,450 cars last year, about 1,000 more than expected
as it ramped up manufacturing at its factory in Fremont, Calif.
"Although the company declined to break out international sales, we
estimate roughly 2,000-2,500 were delivered outside of the U.S.," Kwei said.
Tesla Chief Executive Elon Musk has said the company will launch sales of
its Model X, an electric SUV, later this year and plans a third-generation
electric car, which will start at about $35,000 within three years.
Less Room for Tesla Arbitrage in China -- WSJ Blog
Jan 23 at 12:32
By Tom Gara
From the WSJ's Colum Murphy in Shanghai:
Electric-car maker Tesla Motors Inc. has revealed how much it will sell
its vehicles for in China--the market expected to become its largest after the
U.S.
Its Model S will have a base price of 734,000 yuan (around $120,000),
Palo Alto, Calif.-based Tesla said on Thursday. That is based on cars with an 85
kilowatt-hour battery pack. The comparable vehicle in the U.S. sells for $
81,070, according to a statement from Tesla.
Tesla described its China pricing policy as a "big risk."
"We know it's unconventional. We know we could charge more," the statement
said. "But we decided to take a chance anyway." It added $3,600 for shipping
and handling, $19,000 for customs duties and taxes and $17,700 for
value-added tax to its comparable U.S. price, it said.
While a Model S will cost you more in China, the gap is much narrower than
it is for other luxury cars. As the WSJ reported in December:
The spread between such prices has led to a cottage industry of
import-export operators buying vehicles in America and driving them straight
onto shipping containers. Some estimate up to 35,000 luxury cars are sent from
the U.S. to China this way each year.
"The price of a Model S in China is the same as the price of a Model S in
the US, adding only unavoidable taxes, customs duties and transportation costs,"
Tesla said in a statement. But why, when competing luxury car brands are selling
well with huge mark-ups, is Tesla leaving money on the table? "We care about
fairness, and we care about transparency. We care about advancing the cause of
electric cars in China" it said.
But the company also cares about selling lots of electric cars, which has
so far proven a challenge to auto makers in China, where the market has slumped
despite generous government incentives. Even with subsidies of up to $20,000
per car, just 17,533 electric vehicles were sold in China in 2013. Electric cars
still have their challenges in America, but by comparison, more than 20,000
Chevrolet Volts alone were sold in the same period.
The problem so far has been that electric cars are expensive, and Chinese
car buyers with serious money to spend are looking for prestige cars, not
necessarily environmentally friendly ones. Hitting China with a luxury model at
a less egregious price is one way Tesla can stand out in a market that has, so
far, not been particularly interested in cars that you plug into the wall.
See also:
China Taxes, Duties Add Up for Tesla Sticker Price - WSJ
Tesla Plans to Add Charging Network in China - WSJ
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