

Tesla Cuts Jobs in China - IBM
http://www.bloomberg.com/news/articles/2015-03-09/tesla-cuts-jobs-in-china-as-sales-slower-than-expected

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macNchz
I found this reddit comment discussing Tesla's (struggling) entry into the
Chinese market to be quite interesting and insightful:
[http://www.reddit.com/r/worldnews/comments/2vgi80/tesla_only...](http://www.reddit.com/r/worldnews/comments/2vgi80/tesla_only_sold_120_cars_in_china_in_january_ceo/cohyvph)

In summary, the Tesla market in the US (upper-middle class, suburban) doesn't
really exist in China, and the lifestyles of those who can afford the car
don't match up well with owning an electric car.

~~~
AndrewKemendo
Guanxi (from the writeup) for anyone who is wondering is the Chinese concept
of one's social status and influence within your personal and cultural
network.

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marvin
My guess would be that they are replacing a significant part of their Chinese
sales team. Tesla mentioned on the earnings call that there were some major
challenges with parts of their team, among other things salespeople
misinformed customers about charging options.

My impression is that they expanded a bit too quickly and ended up missing
some important cultural details. Analysts read this as "Tesla expects China
sales to be 30% lower than expected", but there is no reason to draw this
conclusion yet.

~~~
wahsd
I don't know. I got a sense that Tesla was trying to deflect. If not, at the
very least, it seems that the blame falls on HQ by not providing proper
training resources.

I suspect the underlying reality is that Tesla is trying to gloss over the
consequences of the oil price collapse and possible under-reported Chinese
economic slowdown.

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Shivetya
Tesla needs time to establish its reputation. With only one car, one that is
expensive regardless of taxation, that is not going to be an easy task. This
may be doubly so in China.

Outside of China...

They really need lower priced cars if they are in it for the long haul. At
their current price point they are merely skimming the low hanging fruit of
the wealthy, people who can afford a second car that has limitations.

They are simply not moving fast enough into the price point of where the
majority of cars sell and as such are ceding that market to the established
players who once they focus their attention will pretty much lock it up
because of better brand awareness. Both Ford and Chevy will have cars in the
lower range with sufficient range by the 2017 model year.

~~~
mikeash
There's no need for a Tesla to be a second car. Lots of people just own that,
and nothing else.

As for an affordable, long-range Ford/Chevy EV in 2017, I'll believe it when I
see it. As far as I know (and I certainly could be wrong), battery price and
production capacity are the limiting factors for an affordable, mass-market EV
at the moment, and Tesla is the only one taking steps to remedy that.

Tesla is also the only one solving the problem of long-distance travel. Ford
and Chevy may produce EVs that can go 200 miles on a charge, but they'll also
go about 200 miles in a day. Tesla's Model 3 will go 200 miles on a charge but
5-800 miles in a day (depending on how hard you want to push it).

~~~
maxerickson
Is the Chevy Volt too pragmatic to be considered a competitor with pure EV?

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coryrc
It's small, uncomfortable, and expensive, as well as having poor mpg on gas.
In about any calculation, a Corolla is a better deal.

The Leaf, on the other hand, is selling gobs of them for a good reason.

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maxerickson
The Volt has an answer for long distance. The Leaf does not.

~~~
mikeash
I think this is a nice summary of what I'm saying. You have two compromised
EVs (or PHEVs) and you're arguing over which compromise is less bad. If they
can't get beyond that stage then they're going to have trouble.

~~~
maxerickson
I wasn't very clear about it, but I was thinking that they aren't necessarily
so far behind strategically. Hybrids don't look so bad if there is no $25,000,
200+ mile range EV (with a good distance solution).

~~~
mikeash
I agree, hybrids are probably your best bet if you're on a budget right now.

What it comes down to, for Tesla's future and the future of EVs, is whether
the big car companies will be able to improve their EVs better or faster than
Tesla can reduce the price of theirs. If Tesla could sell the Model S for the
price of a Leaf, they'd sell like crazy. If Nissan could make the Leaf as good
as a Model S, they'd sell like crazy. The question is, which end do the odds
favor? I think Tesla has a better chance, partly because it's all they do, and
partly because it just seems like their task is the easier one at this point.

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desdiv
Why so hasty? Tesla announced the Chinese pricing barely a year ago[0] and
only started delivery last April[1].

[0] [http://www.teslamotors.com/blog/fair-
price](http://www.teslamotors.com/blog/fair-price)

[1] [http://www.bloomberg.com/news/articles/2014-04-10/tesla-
kick...](http://www.bloomberg.com/news/articles/2014-04-10/tesla-kicks-off-
china-sales-this-month-with-musk-helming)

~~~
pavlov
10 months is probably enough to find out if the current sales model wasn't
working. In that situation, there's nothing to gain by waiting out and giving
things a chance to work out on their own.

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z92
Any link with the falling gas price?

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peterfirefly
Probably not. Teslas are still (far) too expensive to be bought in order to
save money on gas, at least for individual customers. Maybe with the Model 3.

~~~
seanmcdirmid
Plus you can buy a tesla in Beijing and other cities without entering the
license plate lottery and without a 2x markup standard on lux cars. They
really should be doing better.

But charging is a problem. You'll see high end Audis parked illegally on the
street because garage spaces are expensive. I'm not really sure how they will
get around that.

~~~
smcl
The license plate lottery?

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seanmcdirmid
If you want to buy a car, you have to enter the plate lottery first. Unless
you have some serious guanxi, it will take a few years for your number to come
up.

~~~
smcl
Wow. On the one hand that's pretty tough, but on the other it's presumably a
semi-useful way to curb air pollution & traffic. I can only imagine what
things would be like if it was a free-for-all.

~~~
fnordfnordfnord
It's hard to imagine that traffic in Beijing could get much worse. I think
there are already a lot of people there who wouldn't have a car for city use,
even without Beijing's restrictions on cars.

~~~
seanmcdirmid
Most people in Beijing don't have cars, that is a scary thought.

Self driving cars will eventually allow Beijing to optimize traffic flows
given the limited infrastructure that can be built for a city of its density.
Until then, I'm a slave to didi dache.

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wcoenen
That little bloomberg live view in the top right corner is a major annoyance;
I can't read articles like this. Fortunately it can be removed with an ad
blocker.

~~~
dEnigma
It's pretty useless too, I can't even make out what it says on my monitor. But
since Flash is click-to-play in my browser I didn't even realize it was there
when I first read the article.

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dragontamer
In contrast: Jaguar sells nearly 40,000 vehicles in January alone.

[http://www.jaguarlandrover.com/gl/en/investor-
relations/news...](http://www.jaguarlandrover.com/gl/en/investor-
relations/news/2014/02/12/january-2014-sales-performance/)

Jaguar has been selling 400k vehicles / year in China.

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wahsd
Another consequence of the oil price collapse. The dominoes are starting to
fall.

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zhaphod
So what you are saying is a person looks at $4 a gallon and thinks hey lets
buy a Tesla which costs $100K. And suddenly the same person will say no reason
to buy a Tesla because now a gallon costs $2. This person doesn't sound like
the sharpest tool in the set.

~~~
wahsd
I don't care what you think of the sharpness of tools. In aggregate, on a
macro level though, it will have an impact on the appeal of electric vehicles,
just like it is intended to. That will happen, regardless of who sharp or dull
you think a tool is.

~~~
mikeash
Yes, but it will not have a large impact on the appeal of extremely expensive
electric vehicles. It would be especially odd if this particular thing was due
to the drop in the price of oil, since it's just China where sales are slow,
and they still have months of backlog in other countries.

