While the company is at a crossroads in many ways, China presents a particularly daunting — and crucial — mission.
Reuters reported that only 120 Model S’s were sold in the country in January, and Musk is reportedly threatening to fire more people on the China team, though he says that “the China thing has been blown way out of proportion,” emphasising the country wasn’t vital to the company’s 2014 performance.
But China does appear crucial to its future.
Tesla has had trouble living up to its promises for China. Former Tesla China chief Veronica Wu said in January 2014 that China would account for 30 to 35% of Tesla’s global sales in 2014. She resigned in December.
From what analysts tell Business Insider, the Model X may be the key to Tesla’s making it in China.
Because the Model S isn’t conspicuous enough, and China is fast becoming a land of conspicuous consumption.
“When Chinese rich buy cars, they want to show off,” says Chinese auto market analyst Jochen Siebert.
The Model S is a mere 56.5 inches tall, making it much less formidable looking than “the car that Chinese love,” the Porsche Cayenne SUV, which stands at an easily seen 67.4 inches. Of the
37,425 cars Porsche sold in China in 2013, 26,666 of them were the Cayenne — accounting for over 70% of sales.
“The Tesla [Model S] is an advertisement, but it’s not tall enough,” Siebert said. “the showoff value is too low.”
For Tesla’s future in China, let’s hope it will.
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