Tesla Motors Inc. (NASDAQ: TSLA), the American company dedicated to produce luxurious self-driving electric cars, which sold just 3,500 cars in China in 2014 and had a complicated 2015 when analyzing its economics, will apparently recover in 2016. Elon Musk, the company’s CEO, announced plans to open a Tesla manufacturing center in the country in order to reduce the prices of the Model S by more than one-third.
China is the biggest market worldwide when referring to cars. Each year, more than 20 million vehicles are sold in the country. It was declared by the government that by 2020 there will be around 5 million cars in circulation. However, introducing electric cars into the Chinese market can be difficult for many car manufacturers, since the country doesn’t own a big platform of charging stations in big cities.
“In the long term, we will probably see equal or higher sales in China than in the United States. That may take five or six years. We are trying to put localized production in China. In the years to come, you’ll see some fairly significant partnership announcements, if you look at China’s fundamentals over the long-term, they are extremely good,” said Ellon Musk in October to China’s state-owned media agency Xinhua.
In order to respond to customers who want to take their cars into long road trips, and who want to use their electric cars in cities where there are not so many charging stations, Tesla is developing a graphene battery which would be able to power the car for 500 miles, that would be translated into a significant improvement, since the actual Model S has an estimated range of up to 300 miles.
The renowned Model S from Tesla became popular with an acceleration system that goes from 0 to 60 miles per hour in as little as 2.8 seconds without a drop of gasoline. Later, the company updated the car’s firmware to implement a self-driving system which appears to have a pristine performance. 11,574 Model S cars were sold in the last quarter.
“Worldwide electric cars sales will hit 600,000 with the U.S. market seen at 180,000. China has achieved rapid development in electric vehicles, it is not known as an innovative juggernaut, however, vehicle safety and the quality of batteries are of concern,” said a spokesperson from the Chinese Association of Automobile Manufacturers to Forbes.
Last week, Tesla announced an alliance with Spotify in order to equip the Model S with Free Spotify Premium, so customers will enjoy music without ads.
Next year, Tesla will unveil a new model that will cost around $35K, which is the lowest price for a vehicle of the luxurious electric car producer. The model that has caused a lot of expectation will be shown in March and preorders will start in the same month.
It is interesting how much this new segment of cars powered without any single use of gasoline is becoming more popular every day in the United States. According to an analysis from Frost & Sullivan, 40% of all zero emissions vehicle sales in the U.S are done in California. It is predicted that sales will grow up to 1.4 million units by 2025 after new zero-emissions vehicle requirements take effect in 2017. The number of sales in 2014 was of 60,000 units.