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Will Tesla Motors Succeed In China?

 February 07, 2013 05:21 PM


(By Balaseshan) Tesla Motors Inc. (TSLA) is entering the Chinese electric vehicle market with a plan to open its dealerships this spring, but the market has consistently underperformed for the electric and hybrid vehicles.

In a recent announcement, Tesla Motors said it has intention to open 25 additional dealerships in the full year 2013 with the first in China.

"In a few months, Model S display cars will begin showing up in our European stores and we look forward to seeing many of you at the Geneva International Motor Show. Our opening in China is still targeted for spring," Tesla's Vice President, Sales & Ownership Experience George Blankenship said in a blog statement.

[Related -Forget Tesla: Profit From These 2 Surprise Electric-Vehicle Stocks]

However, according to Jing Daily, the electric and hybrid vehicles have consistently underperformed in the Chinese market as it have been far less popular than European markets and the outlook seems cloudy.

On the other hand, Ford Motor (NYSE: F) Executive Chairman Bill Ford said at the end of November last year that China should facilitate the adoption of electric cars and embrace new technologies in a step against traffic congestion and air pollution, according to the Bloomberg.

[Related -Tesla Motors Inc. (TSLA) – 3T Analysis: Driving Towards the 52-Week High]

In addition, manufacturing companies in China are also targeting to bring in electric and hybrid vehicles in to the market. Recently, Chinese-owned auto-parts company Wanxiang America Corp. had acquired the assets of bankrupt battery maker A123 Systems Inc. for $256.6 million in cash.

It is yet to be known how vehicles of Tesla Motors will be accepted by the consumers in China. But China will see lots of electric vehicles as automakers are venturing into the market.

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