Seeing a Tesla vehicle driving down roads in the biggest cities of China is becoming commonplace. In 2016, Tesla’s sales tripled in China compared to 2015, to more than 10,400 units, shows research done by JL Warrant Capital.
That represents 13% of the close to 80,000 cars Tesla delivered around the world. The company in March reported that it had earned revenue of over $1.1 billion during 2016 in China, which helped Tesla join the Fortune 500 for just the first time, with worldwide revenue of more than $7 billion
Since then, its business in China has grown even more. It imports for the first quarter of 2017 have the electric carmaker on pace to double sales easily during 2017.
Wealthy drivers have been crowding Tesla showrooms across China’s biggest cities, while buyers have put $1,200 down to preorder Model 3 sedan of the company in numbers that are No. 2 behind just those of the U.S.
The increase of sales is the best sign yet Tesla has been able to turn a corner in the largest auto market in the world. This has also caught nearly everyone by surprise.
Just last summer, Tesla was said not to understand China. The carmaker was headed toward its third straight year of poor sales.
The few people who knew about the vehicles did not know how one was recharged; those who had preordered vehicles faced delays in delivery; and service that was iffy at best.
In addition, Tesla did not have a joint venture partner, which has helped other foreign automakers break into the market in China.
Not many people had confidence in the future of Tesla in China, but the few that did were right. There is no one explanation for the breakthrough made by Tesla. Sales were lifted from the Model X, a luxury SUV for a country made about SUVs.
Tesla also was the benefactor of a number of charging stations; from its model of direct sales in a country in which buyers feel dealerships fleece them; and from Elon Musk, the CEO having a celebrity status amongst Technorati.
However, having good relations with the government help matters in a nation where the state holds enormous control over the economy, and the technology of Tesla just aligns in a perfect way with the priorities of the Beijing.
Tesla co-founder Martin Eberhard says that the automaker was started as a way to fight against climate change and there is nowhere that is more important than in China.