China: will Tesla heat the car luxury war? image

As news start coming about Tesla more and more from China rather than their usual US place, we start considering if the Model S is ready to compete with the likes of Porsche.

As locally built cars will forego on import duties and other taxes, Tesla’s Model S won’t be able to compete with many of the premium offerings on the Chinese market – like BMW, Audi, Mercedes, Volvo or Cadillac.

But with a retail price of 734,000 yuan ($121,300), after shipping costs, import duties and other taxes add to the US $81,070 base price, the Model S – which CEO Elon Musk praised for not “ripping off” customers in China – might go head to head with offerings from Porsche, for example.

The Porsche 911 base price in China is 753,000 yuan ($123,645), while the best-selling Porsche Cayenne starts at 922,000 yuan ($151,400).

Still, Tesla faces big problems in China: its an electric car that needs to slot itself as a luxury sports car, because electrics haven’t really started gaining much traction in the country. Than, its price, even if wisely slotted to avoid charging an additional arm and leg, is still way bigger than other very sound premium offerings. After that, like in any other country – just that China is way bigger – a good distribution network is key to success – for the year they are aggressively expanding to 10-12 locations, but it’s still very low compared to Porsche, which has 56 locations and plans a two year expansion to 100.

Via Forbes