Tesla goes to China: charging is a genuine challenge

Tesla Supercharger (Werner Bayer CC BY 2.0)

It’s no secret that Tesla’s sales in China are materializing more slowly than expected (and no surprise – China has proven a tough nut to crack for many Western firms). Elon Musk acknowledged the difficulties in February, but as always, put a brave face on things: “Things were a little weaker in China because of some communications issues, most importantly around charging,” he said. “There was a misconception that charging was difficult in China.”

However, the Chinese charging challenge is “[not] just a misconception, it’s a concrete problem,” according to Lilia Xie, a research associate with Lux Research. “China’s infrastructure, in many ways, is not ideal for supporting electric vehicles.”

Most Chinese live in dense urban areas, and lack private garages. Car owners typically park on the street, which makes it difficult to install private charging infrastructure (London faces a similar problem).

Tesla is doing what it can to address the issue, offering free at-home charging, quickly expanding its network of Superchargers and Level 2 public chargers, and working with property owners to encourage the buildout of charging infrastructure.

There’s a lot of ground to make up. According to Fortune, Tesla sold an estimated 3,500 cars in 2014, short of its goal and behind local competitors BYD and BAIC. According to Karl Brauer, a senior analyst with Kelley Blue Book, Tesla will need to sell at least 1,500 cars per month in China in order to reach its goal of 55,000 in global sales in 2015.

“Between launching in China and launching the new Model X, Tesla is reaching a critical make-or-break point,” Brauer said. “It has to accomplish both goals successfully this year, plus keep its Gigafactory on schedule, or its stock price could drop quickly.”        

 

Source: Fortune
Image: Werner Bayer CC BY 2.0