5 ms·

Tesla Cuts Jobs in China

45 points by IBM 12y ago

desdiv 12y ago
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-kicks-off-china-sales-this-month-with-musk-helming http://www.bloomberg.com/news/articles/2014-04-10/tesla-kick...
- pavlov 12y ago
  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.
wcoenen 12y ago
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 12y ago
  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.
z92 12y ago
Any link with the falling gas price?
- peterfirefly 12y ago
  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 12y ago
    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 12y ago
      The license plate lottery?
      - smilekzs 12y ago
        The H-1B for owning a car in Beijing, basically.
      - seanmcdirmid 12y ago
        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 12y ago
        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 12y ago
        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 12y ago
marvin 12y ago
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 12y ago
  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.
Shivetya 12y ago
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 12y ago
  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).
  - dragontamer 12y ago
    > 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. Kinda, not really. LG Chem's Michigan factory is selling to both Ford and GM now, and I hear that its still got production capacity to grow. Michigan in general is littered with the scattered remains of various battery manufacturing facilities that have gone bankrupt through 2010 and 2015. The investments are there, the market demand for EVs isn't however. The hope is that Tesla will be different however, which it may very well be. But it is treading upon a region where many others have failed.
  - 12y ago
wahsd 12y ago
Another consequence of the oil price collapse. The dominoes are starting to fall.
- zhaphod 12y ago
  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 12y ago
    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 12y ago
      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.
macNchz 12y ago
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_sold_120_cars_in_china_in_january_ceo/cohyvph http://www.reddit.com/r/worldnews/comments/2vgi80/tesla_only... 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 12y ago
  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.
dragontamer 12y ago
In contrast: Jaguar sells nearly 40,000 vehicles in January alone. http://www.jaguarlandrover.com/gl/en/investor-relations/news/2014/02/12/january-2014-sales-performance/ http://www.jaguarlandrover.com/gl/en/investor-relations/news... Jaguar has been selling 400k vehicles / year in China.

45 points by IBM 12y ago

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

pavlov 12y ago
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.

wcoenen 12y ago

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 12y ago
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.

z92 12y ago

Any link with the falling gas price?

peterfirefly 12y ago
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 12y ago
  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 12y ago
    The license plate lottery?
    - smilekzs 12y ago
      The H-1B for owning a car in Beijing, basically.
    - seanmcdirmid 12y ago
      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 12y ago
        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 12y ago
        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 12y ago

marvin 12y ago

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 12y ago
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.

Shivetya 12y ago

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 12y ago
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).
- dragontamer 12y ago
  > 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. Kinda, not really. LG Chem's Michigan factory is selling to both Ford and GM now, and I hear that its still got production capacity to grow. Michigan in general is littered with the scattered remains of various battery manufacturing facilities that have gone bankrupt through 2010 and 2015. The investments are there, the market demand for EVs isn't however. The hope is that Tesla will be different however, which it may very well be. But it is treading upon a region where many others have failed.
- 12y ago

wahsd 12y ago

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

zhaphod 12y ago
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 12y ago
  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 12y ago
    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.

macNchz 12y ago

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_sold_120_cars_in_china_in_january_ceo/cohyvph http://www.reddit.com/r/worldnews/comments/2vgi80/tesla_only... 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 12y ago
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.

dragontamer 12y ago

In contrast: Jaguar sells nearly 40,000 vehicles in January alone. http://www.jaguarlandrover.com/gl/en/investor-relations/news/2014/02/12/january-2014-sales-performance/ http://www.jaguarlandrover.com/gl/en/investor-relations/news... Jaguar has been selling 400k vehicles / year in China.