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Tesla’s China Dream Threatened by Standoff Over Shanghai Factory
- jblow 9y agoThe tone of the first paragraph should tell you everything you need to know about this article.
- vkou 9y agoIn the short term, Tesla needs China more then China needs Tesa. Tesla's shareholders would revolt if Tesla gave up the Chinese market. In the long term, this will help bootstrap China's expertise in electric car manufacturing. It's a brilliant economic policy. Foreign companies cannot resist access to such a large market - they can either partner, or watch their competitors do so.
- Retric 9y agoIntel and several others successfully abandoned China without issue. The rational choice in high tech manufacturing is to say as far away as possible.
- bilkoo 9y agoWait, what do you mean Intel abandoned China?
- Retric 9y agohttps://en.wikipedia.org/wiki/List_of_Intel_manufacturing_sites https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si... Intel's only factory in china uses 300 or 65 nm processes. That's Pentium 4 level manufacturing, and clearly not using critical x86 IP. They are currently building yet another US factory for 7 nm processes.
- fspeech 9y agoNot sure if you know about export control and the Wassenaar Arrangement. I don't think Intel can manufacture in China at the advanced node even if they wanted to.
- rasz 9y agoIntel gave China x86 IP for free (atom) + another Billion dollars "investment" to build a fab, all just in case they would be next in line for anti monopoly fine after Qualcomm got punished. Intel used to dump Atoms below manufacturing cost on Chinese market, their domestic SOC vendors didnt like that and it was either handouts painted as joint venture or heavy fines.
- SEJeff 9y agoI would not revolt if Tesla gave up china, but I only have a measly 100 shares!
- w4tson 9y agoI own 7 shares and I’m irate ;)
- anthonyleecook 9y agoGoogle, Facebook, Twitter, github, Pinterest, rakuten, slack, Dropbox and many others are all doing fine without China.
- stingraycharles 9y agoAll companies that aren't producing any actual physical stuff. At least use a fair comparison rather than comparing a car company with a bunch of online services.
- anthonyleecook 9y agoNintendo, Microsoft Xbox
- Naritai 9y agoXbox is almost certainly manufactured in China. If you know otherwise, could you provide a source?
- seanmcdirmid 9y agoIt wasn’t sold officially in china up until three years ago.
- taobility 9y agoThat's because China banned all game consoles at that time. All these game companies crazily want to join that market.
- BatFastard 9y agoThe whole joint venture requirement of China is just another way for China to steal IP and money from other countries. Talk about China taking advantage of the US and EU.
- anthonyleecook 9y agoIt’s interesting that companies are willing to risk losing their lead to a copycat chasing a 10T economy when us + eu + japan is 40T.
- Analemma_ 9y agoMost companies aren’t as desperate for free cash flow as Tesla is. They (literally) can’t afford to ignore China.
- majormajor 9y agoThis gets really fun when thinking about media piracy. The risk of ignoring a market isn't just the lost immediate revenue, it's that that market might develop in ways that are worse for you in the long run. The canonical can't-argue-against example of pirating a movie or show is "I literally can't even pay to watch this in my country, right now." But once a substantial industry exists to satisfy the people with no legal option, the people in the countries with plenty of legal options have access to it too! And then it turns into "why pay when torrent?" If Spotify had existed worldwide in 1998, would Napster have been big? If Netflix/Hulu/Amazon/iTunes purchases+rentals had all existed and been global in the year 2000, would movie/TV file sharing have taken off in the same way it did? Or would it be more like app store piracy - I'm sure it exists, but I don't know anybody who bothers, and those things were global and online from day 1. The comparison to cars isn't direct, but it's not hard to find disruption of physical goods manufacturing sparked by lower-end-at-first competitors arising from a less-served market.
- mastax 9y agoThe copycats are coming either way, you might as well make some money in the mean time. Even if it were impossible for copycats to emerge without these partnerships (so ignore domestic innovation, reverse engineering, foreign education, foreign consultants, and espionage) odds are your competitor already partnered so you have nothing more to lose.
- JustAnotherPat 9y agoMake them in Vietnam and let the rich Chinese buy them as status symbols. Everyone else can stick to the Chinese lemons.
- greglindahl 9y agoRight now they make them in California, no reason to do it in Vietnam.
- imron 9y agoYep. Just be sure to sell them in black. An inflated purchase price thanks to 25% tariffs just makes them more attractive to buyers who don't care about price.
- reaperducer 9y agoDoesn't China understand it's supposed to roll over for any tech company with the word "disrupt" in its brochure?
- ng12 9y agoIf you think electric cars are mockingly disruptive I would love to know what you think actually is.
- reaperducer 9y agoNot mocking the car. Mocking the typical SV hype.
- danimal88 9y agofrom my experience operating in China, its really pretty hostile to foriegn enterprises. If you want to import into China, you face incredibly high import duties. If you want to open a WOFE (wholly owned foreign entity), you have to recursively give them your ownership information so if you are venture backed, they will require your cap table, your investors cap table etc, etc. There is a reason there are very few American products in China outside of the biggest American brands, its simply too difficult and has too much compliance. I love China, but I do think the trade rules asymmetry with the US will need to be addressed at some point. There hasn't really been a detailed and honest discussion about this.
- mathperson 9y agoIt was called the tpp...
- whatyoucantsay 9y agoDon't be naive. The TPP will no more fetter the CCP than the WTO has.
- mathperson 9y agoWell the US is no longer part of the tpp.... In the counterfactual world where tpp is signed by the American president I think it would have quite potent https://www.google.com/amp/foreignpolicy.com/2015/10/07/china-tpp-trans-pacific-partnership-obama-us-trade-xi/amp/ https://www.google.com/amp/foreignpolicy.com/2015/10/07/chin...
- whatyoucantsay 9y agoWhy? The US is part of the WTO, which has been woefully incapable of reigning in Chinese currency controls or limits on foreign companies.
- hux_ 9y agoI don't think there is any asymmetry unless you are American. Where are the Chinese branded products on American shelves? This story plays both ways.