Considering the preferences of the modern consumer in China, Tesla’s (NASDAQ:TSLA) electric vehicles seem destined to have a wide appeal in the world’s top auto market. However, trademark issues and questions about import tariffs have forced Tesla to open showrooms and a website with neither a brand name nor a price tag for its Model S cars.
Word of the difficulty Tesla faced with respect to its brand name originally surfaced over the summer. Reuters reported in August on the problems Tesla had wresting its brand name away from a Chinese businessman who had registered the name for his own model of electric cars. That stuggle continues even as Tesla has launched its Chinese website and opened its first showroom in Beijing.
As a result, the introduction to the Chinese market has been described as “unusual” by industry experts. China Automobile Dealers Association’s Luo Lei told United Press International that the Tesla rollout diverged from the path car companies usually take.
“[T]raditional car makers enter foreign markets only after all the preparatory work is done,” Lei told UPI. Of course, Tesla has proven successful in the past when forging its own path.
Few industry analysts would argue it’s a good thing that Tesla can’t market its electric vehicles using the brand name known throughout the Western world. However, the price question has introduced even more complications.
Multiple sources report that Tesla has to wait until Chinese government officials determine tariffs on the Model S before they can officially set a sticker price for the electric car. China has been offering subsidies to domestic electric vehicle makers but all foreign cars face import taxes when hitting the Chinese market. Once these issues get squared away, Tesla can begin filling the hundreds of orders already taken on the Model S in China.
International Business Times reported in October that, according to Chinese sources, the first Tesla Model S delivered in China (via Shanghai) cost the buyer $410,915. That’s a steep price tag, even for the wealthiest buyers. Nonetheless, local industry experts see Tesla taking off in the world’s biggest auto market.
“As an innovative company, Tesla has a promising future in China due to an increasing demand of luxury cars,” CADA’s Luo Lei told United Press International. The automaker just needs a sticker price for the Model S and a brand name free of trademark issues.