Tesla China Factory Coming Soon? Stars Aligning [highlight]
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Tesla China Factory Coming Soon? Stars Aligning [highlight]

August 14, 2019


– The first story is about Tesla bringing the Model 3 to China, and this is the first time
that they’ve actually done it. Other people have imported
the Model 3’s to China, but at the Chinese Auto Show, which happened just last
week, Tesla brought a Model 3. Now, this is significant because China is the biggest market in the
world for electric vehicles. They, just on a total number of vehicles, have more than any other
country in the world. Now, places like Norway
and a few others have more per capita like percentage wise, but China has the largest number. So if you’re just thinking in terms of like a company wanting to
sell electric vehicles, China is a very desirable place to be. Now the thing about this,
that’s super interesting. Not only did they kind of steal the show at the Beijing Auto Show, but China is giving them these new rules that are going to allow
them to own the factory. You see, the thing before was that, you had to have the Chinese
Government own, I’m sorry, you had to work with a Chinese company and that Chinese company had to owned by the Chinese Government. Remember it’s still Communism for like, their style of Government. So even though there’s economic freedoms, and things are obviously changing there. In terms of just like the
rules of how it works, a lot of companies had a
hard time with that because these other companies can steal their IP. They can start their own thing, plus not all the profits
go to them, et cetera. There’s all these
different things about it. Here now, with these new
rules, China will allow Tesla to build their own factory,
that they wholly own. This will also mean that they can stop, they won’t have to pay the import duties and they won’t have to import cars at all. They’ll make them there
and then sell them there. And again, the world’s largest EV Market, this could be huge for Tesla. So there’s a Bloomberg Businessweek piece that talks about this. The news, one of the
things that they mentioned, which I thought was interesting. This is great news for Tesla. This is like tremendous news. ‘Cause we all know and
Tesla’s talked about they’re going to be doing
something in China soon, but the Stock Market didn’t
care at all about this news. And so obviously, there’s
more going on there. And this is going to be, and I’ll talk a little
bit more about this, this is going to be an
interesting week as the earnings call is this Wednesday. So, if you look at these charts, there’s some really interesting data here around the actual size of the
market and everything else. So, I’m really hopeful
that Tesla will be able to make this happen. I do think that, you know,
Tesla’s already pretty successful in China and with the ability
to build a factory there and do this, it’s going to be tremendous. So, I’m curious what you
guys think about that? Tesla does have some cash burn issues. So there’s a question
here about whether or not they’ll be able to do it. And this is one of the
big things that, I think, everyone is really interested
to hear more about, this Wednesday, during the earnings call. Is how bad was the net loss in Q1? And then, how quickly are they going to be able to turn it around? What are the true numbers
behind the Model 3? And all those kind of things. I mean we have little
tidbits here and there, but this, the earnings call
with the financial statements, will really kind of paint
that picture in a clear light. And then, that will make
this question a much bigger, a much more concrete, on whether or not it even
makes sense right now. Whether or not they need to raise money. Or whether or not if the Model 3, truly makes them profitable in Q3, as Elon had tweeted about. Will they be able to then, you know, take that kind of goodwill, raise money? Like, what will the plans be? Hopefully, this question gets asked, because Tesla going
after the Chinese market, by building a factory there locally, could really be a major win for them. In fact, their revenue from China has skyrocketed over the past few years. So I’m really excited about this. I’m curious about what you guys think. You know, this may open up
other Asian Markets as well. India is a big one that Tesla
has talked about in the past. You know, it’s not too
far, so really, really, lots of questions there. I’m curious what you guys think? Let me know on Twitter or
in the comments down below.

17 Comments

  • Reply glenn goodale May 2, 2018 at 2:02 pm

    first …..Thanks for sharing!

  • Reply Rahul A May 2, 2018 at 2:15 pm

    i guess President trump is winning the trade war with china! I guess elon is happy now ! love from india!

  • Reply Robert Bytnar May 2, 2018 at 3:04 pm

    I think this would be great for Tesla as a company in the world's largest EV marketplace, but fear the theft of Tesla's designs and electronics.

  • Reply Rounak Mahato May 2, 2018 at 3:34 pm

    When Tesla will come to India?

  • Reply Manny Silva May 2, 2018 at 4:58 pm

    Building Factories in China is good for Tesla and the environment as Tesla can put more cars in the large population's hands. But its bad for the USA because we are not building them, and China can turn around and steal Tesla's manufacturing facility and technology, and build a Tesla clone themselves if they so please.

  • Reply Andrew Hart May 2, 2018 at 5:01 pm

    The Chinese government doesn’t need to own half the company. China does have private companies and the rule was that a joint venture was required with a Chinese company

  • Reply Donald Knieriemen May 2, 2018 at 7:59 pm

    Would you build you house in China and trust the Communist government, and your future there?

  • Reply Tired AF May 2, 2018 at 9:49 pm

    are they? in this day and age any factory opening in china is interpreted as "stolen job" from the US.

  • Reply Avalanche2 May 2, 2018 at 10:34 pm

    What's a Tezzla?

  • Reply 任戰 May 3, 2018 at 1:29 am

    Tesla and all other US automakers will not make any money in China. China will soon announce that any Chinese who buys an american car will get a deduction of 50 points in their social credit score. buying an iphone will loose 30 points. China doesnt even need tariff to kill all US companies in China. If you hold Tesla or Apple stock, its time to sell them before the announcement. i know people who are working on this in China

  • Reply Paul Bartlett May 3, 2018 at 2:10 am

    Sorry to be so negative. China will try to steal every thing Tesla does and then try to replicate on a global scale. China business is merciless. They can copy any and everything, then produce it cheaper. Is there any IP that China hasn't already got from Tesla? Maybe. But that will be gone. Will it be good for Tesla business. Probably in short term (2-3 years). Will it help the planet in longer term, possibly. But my experience in doing business in China has been awful. I worked for a scanner company a few years back. We had some great R&D and a world beating scanner. We tried to sell to China. They dragged everything with red tape. We sold nothing, but 1 year later an exact cheaper clone came out. Not saying that will happen with Tesla – they are bigger — but I would be very very very careful doing business in China.

  • Reply Federico Galimberti May 3, 2018 at 3:37 am

    Ben,
    Actually the Chinese company does not necessarily need to be owned by the Chinese Gov’t.
    Yes you are correct about needing the JV format and that this could end quite soon for a foreign car venture in China. This is good news for Tesla and matter of fact any company that’s required the JV format today

  • Reply jellyandme May 3, 2018 at 5:43 am

    Such a bad idea. Imagine how things would be if apple didn't have their products in china, none of the modern Oppo/PlusOne, huawei, xiaomi phones would exist. China really isn't worth losing your ip for.

  • Reply Nirav Patel May 3, 2018 at 11:58 pm

    There is a huge market in India for Tesla as well. All high end model Model S will be owned by super rich and many middles class will own M3. There is an option to place an order based on the Country on Tesla site.

  • Reply Andrew Hart May 4, 2018 at 9:09 am

    Comments arguing that Tesla shouldn’t build a factory in China make no sense to me. Should BMW not have factories in the US? China is no longer a backward country that needs to play catch up with the west. If Tesla doesn’t satisfy the huge market demand Chinese companies will. Tesla will succeed for the same reason it has so far … innovation … which is all taking place in the US. Chinese firms will of course learn from Tesla , just like GM and ford learned from Toyota … but that would happen regardless of whether a factory is built in China

  • Reply Roger Lee May 6, 2018 at 3:53 pm

    It's going to take at least 2 or 3 years to build a factory. EM needs to stay focused and not get into unnecessary feuds with WS analysts and Warren Buffett.

  • Reply Nikola May 9, 2018 at 8:31 pm

    Tesla needs help, all companies every day watch and comment on how Tesla Motor will lose. Companies from General Motors or Ford who are losers at the moment can assemble Tesla! There is no need for Musk to look for help in China, but he will do so if he is suffocated in the US. Build Tesla and winner will be US! If someone is successful go help them, the whole world needs best electric cars!

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