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Tesla Started Taking Orders For Its Model From Chinese Customers: Reports

Tesla Started Taking Orders For Its Model From Chinese Customers: Reports
According to media reports and indications on its website, Tesla has begun accepting orders for its Model 3 electric car from consumers in China.
Reuters was the first to report this development by the all electric car manufacturer of the US. 
The information and the report has not been confirmed by Tesla. Neither has it spoken about the information available on its own China focused website.  It founder and CEO Elon Musk however did tweet to say that some of the customers in China would get delivery of cars most probably in March but “April is more certain” for more customers in the largest electric car market of the world.
According to reports and information available on the China website of Tesla, the Chinese customers need to make a deposit of 8,000 yuan, or about $1,153 to start the process of booking a model 3. The customers are also allowed to choose their own preferred configurations of the car which includes elements such as paint colour and some other features. The rest of the amount needs to be paid by the customer at the time of taking delivery of the car. An online agreement is ultimately made between the two parties.
As is evident in the FAQ section of the website, the bulk of the options including the Performance variant, will be made by Tesla. Most of these options are also available for the Chinese customers as they are for the company’s customers in the United States. The website however does not make it clear if the Chinese customers would be offered the cheaper mid-range version of the Model 3.
In the largest electric vehicle market in China, Tesla has had mixed success in China. The US company has employed up to 600 people in China for the Chinese market in 2014 when the company had first started delivering Model S vehicles in the market. Tesla opened up retail showrooms and service centers and even constructed some fast charging stations which are known as superchargers.
In 2014, about 3500 vehicles were sold in the Chinese market by Tesla which was lower than the target it had set itself for the market and lagged well behind the number notched up the major competitors of Tesla in the market - BYD and BAIC, both Chinese companies. The slowness of demand for its cars also continued into the beginning of 2015. However, in 2016, the fortune of Tesla in the Chinese market had changed as the company sold three times the vehicles it had in the previous year and continued the gains into 2017.
But currently, the company has been troubled with strong headwinds because of the trade tariffs imposed by both the US and China in an escalating trade war.
Based on its strategy of avoiding the trade tariffs and the heightened shipping costs of exporting US made cars into the Chinese market, last month Tesla announced the speeding up of the construction of its factory in Shanghai. Both these headwinds had the impact of increasing the ultimate price of its electric vehicles in the Chinese market.
Tesla has had to face import tariffs of 40 per cent imported into China compared to the usual 15 percent import duty for car makers from other countries. This creates a huge price difference for Tesla’s cars on the higher side.

Christopher J. Mitchell

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