Tesla Motors Inc CEO Elon Musk shocked Wall Street when he revealed that his firm plans to build and deliver 500,000 cars by 2018. Now, fresh revelations have emerged on how exactly Musk plans to deliver 500,000 cars by 2018 and 1million cars by 2020. Elon Musk seems intent on breaking into the Asia-pacific market to jumpstart growth and future probability.
You’ll remember that Tesla began making inroad into the Asia-Pacific when it began selling its cars in China in 2014. So far, the firm has not recorded much success in the country. However, a local manufacturing presence and zero-interest financing deals could spur sales in the country going forward.
Tesla signs MOU to start production in Shanghai, China
Tesla’s 500,000 cars production target looks unrealistic because its Fremont, CA plant might not be able to produce that much EVs in a year. For instance, the factory had a peak production of 428,000 units when it was a JV between Toyota and General Motors. Tesla is still in the process of retooling the Fremont factory to build EVs; hence, making 500,000 cars from that factory in the next two years might be a tall order.
Breaking news from China has it that Tesla Motors in talks with state-owned Jinqiao Group to build a production facility in Shanghai. Elon Musk is reportedly ready to invest as much as $9B in setting up a local manufacturing presence in China. The MOU signed with Shanghai would have each party investing about 30 billion Yuan ($6.12B) to setting up the factory. Sources with knowledge of the negotiations have revealed that Jinqiao will provide land as part of its investment to the deal.
Tesla is also in discussions with officials in the Chinese cities of Suzhou and Hefei on the possibility of opening a factory in either city. A great point to note is that, a local manufacturing presence in China would make it easier for Tesla to compete with local Chinese automakers on price. China charges a 25% tax on imported vehicles and the tax makes its cars much more expensive than cars produced locally.
Tesla starts zero-down payment and zero interest rate financing in China
Tesla Motors has launched a zero down payment and zero-interest rate-financing program for buyers in China. The financing program is part of its efforts to compete effectively with Chinese rivals and in order to boost sales in China. The firm announced that its will be working with Fosun, a Chinese financial service firm to offer financing for buyers of the Model S.
Under the financing program, buyers can get zero-interest rate on a one-year financing program. Buyers will however pay 2% interest on the two-year financing program and a 6% rate applies to the three-year financing program. Buyers can also choose to finance the purchase of the Model S 75 without any down payment.
In other news, Tesla is planning to strengthen its presence in the Asia-Pacific region by setting up shop in South Korea. The firm has registered as a corporation in Korea, it his planning to lease an office space in the capital city of Seoul. More so, listings on its website show that the firm is advertising for sales and engineering positions in South Korea.