Since Tesla’s entry into the Chinese market, consumers have had mixed reactions to the pricing of its vehicles. While some are excited about the brand’s cutting-edge technology and environmentally friendly reputation, others have expressed concerns about the high cost of Tesla cars in comparison to traditional gasoline-powered vehicles.
Despite this, Tesla has seen a surge in sales in China, with many consumers willing to pay a premium for the brand’s sleek designs and state-of-the-art features. The company’s commitment to expanding its presence in China, including building a Gigafactory in Shanghai, has also contributed to its popularity among Chinese consumers.
Some analysts believe that as Tesla continues to ramp up production and expand its offerings in China, prices may become more competitive, making it more accessible to a wider range of consumers.
Overall, consumer reaction to Tesla’s pricing in China reflects a growing interest in Electric vehicles and a willingness to invest in sustainable transportation options.
Watch the video: Tesla in China: Consumer Reaction to Pricing
2014 is destined to be a promising year for Tesla in China. First, it officially announced pricing for the Model S sedan; soon afterwards, the company won the legal battle to reclaim the Tesla brand name in Chinese which had been taken up by a Chinese businessman in 2011. Now, Tesla has purposefully priced at 700,000 RMB (USD $120,000), shunning the standard industry practices that would inflate the price to USD $160,000. Reactions have not all been favorable.
“They’re basically calling us huge idiots for not ripping off customers in China,” says CEO Elon Musk.
Tesla has great ambitions for the Chinese market. Musk anticipates sales of Model S cars in China will match the sales in U.S as early as 2015. Senior China executives also say the company plans to establish stores in 10-12 cities in China this year.
Is the pricing strategy too aggressive as much of the U.S. media has commented? Will Tesla consumers associate the lower price with inferior quality? Is the Supercharge network the biggest challenge for Tesla in China? MindSwarms asked consultant Gu Hong, a Beijing resident currently hunting for a new car, to share his thoughts on the topic.
Q: What do you think about the pricing for Tesla in China? What do you think is the biggest “pain point” for Tesla in China? As a consumer, what holds you back from pre-ordering a Tesla?
A: I think the price-setting mechanism is reasonable. Considering the price difference between the markets in United States and China for other luxury car brands such as Mercedes-Benz and BMW, I think the Tesla’s price is pretty reasonable. The greatest obstruction is the co-operation with the government during the process of setting up electric-charging stations seeing that many interfaces and relations would be involved with governments and interest groups, which is a very tough issue. Additionally, we’ve heard rumors the company might be purchased, so there is doubt about product research and development ability of the company in the future.
For the reasons why Tesla might see satisfactory numbers of purchase orders, price is definitely one. The more than 700,000 RMB price is still a little expensive to pure middle-class population; the limited issue of license plate to newly-purchased car in Beijing is also a factor; and lastly the after-sale system, or supporting facilities, is not fully established such as non-popular and non-convenient access to electric-charging stations, which makes it very difficult to persuade people to buy a Tesla.
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