China has very high ambitions for the electric vehicle. In concrete terms, there are currently 5% of electric registrations and the party’s planning calls for 20% of them by 2025. Does the explosion in Model 3 sales as soon as China’s confinement ends explain these recent changes?

The new policy, below, applicable to NEVs (Electric Vehicles, Plug-in Hybrids and Hydrogen Vehicles) will take effect today (23/04/2020):

  • Vehicles based on change technology will be favoured. Does the subject of “Battery Swap” sound familiar? The Tesla Model S were all designed to be compatible with this technology, which was discontinued in the early months of supercharger deployment.
  • The subsidies offered by the government will be reduced and extended until 2022. It should be noted here that they were scheduled to end for all electric vehicles at the end of this year.
  • Most importantly, these subsidies only apply to vehicles that cost a maximum of 300,000 Yuan (approximately $42,000).

It is important to note that NIO has a battery replacement network accessible in car parks and other strategic locations.

NIO Battery Swap Station

These are measures to protect this strategic market in the post-confinement context that China is experiencing, which has seen a 50% drop in sales in March compared to March last year due to containment.

It will be very interesting to follow the adaptations of Tesla to respond to this new context but it would be interesting to see the deployment of a supercharger network exclusive to the Chinese market.

We have two outstanding issues:

  • Is the Tesla Model 3 compatible with the battery replacement technology developed?
  • Will Tesla seek grant eligibility in a context where the end of grants was anticipated and the brand does not suffer from a demand problem?

One thought on “China: Serious Threats to Tesla

  1. La demande du marché pour Tesla en Chine est telle que Tesla vient d’augmenter ses prix des Model 3 SP+ et LR et d’offrir de nouvelles options payantes (sièges blancs par exemple).
    Seule Tesla peut se permettre d’augmenter les prix et de continuer à écouler la totalité de sa production locale en Chine.
    Je ne pense pas que Tesla aie le moindre souci à se faire au sujet de son chiffre d’affaires en Asie durant cette période de redémarrage post-confinement.

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