We’re not surprised that the Chinese are anxiously awaiting the launch of the Tesla Model S this spring. After all, China is currently the fastest-growing luxury vehicle market on the planet, and pressure from the government to reduce emissions should lead people to consider upscale cars with smaller environmental footprints. What is surprising, however, is how quickly Tesla’s billionaire CEO, Elon Musk, anticipates Chinese demand for the Model S to match the demand here in the U.S.
Tesla Motors will begin selling the Model S in China in March. According to Automotive News, Musk mentioned that China “could be as big as the U.S. market, maybe bigger.” If demand for premium electric vehicles swells as quickly as is anticipated, Tesla may seek plans to produce the Model S locally for the Chinese market.
The Model S for the Chinese market will cost as much as 50 percent more than it does in the U.S. Much of the price increase comes from current shipping costs and export taxes. For example, a Tesla Model S with the 85 kWh battery pack starts around $81,000 in the U.S., but it’ll cost closer to $121,000 in China. Even that price is considered well under what Tesla could charge, though; the automaker could charge as much as $160,000 per car, and remain consistent with standard industry practices.
That, however, isn’t the game Musk wants to play. “They’re basically calling us huge idiots for not ripping off customers in China.” Musk said. “I don’t think ripping off customers is a good long-term strategy.” Other foreign companies have been challenged by the Chinese for their increased prices, and it would seem that the folks at Tesla are trying to dodge that bullet. If Tesla manufactured the Model S in China, there’s a chance that the cost savings could result in making the car even more affordable in the future.
For now, Tesla faces the biggest challenge with the relatively weak infrastructure of electric vehicle charging stations. Once owning an electric car becomes more practical to the masses, the company may be able to focus on developing a plan to build the car overseas, with the same rigorous standards the company uses stateside.
After all, the Model S remains the highest-rated vehicle in Consumer Reports’ history, and that’s a medal the brand wouldn’t want to lose.
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