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Tesla, Nio cement China’s importance to global EV industry

(ATF) Tesla is seeking to create a China-only car, as its Chinese rival Nio mulls making overseas models of its own electric vehicles (EVs) under a separate name. 

In a weekend that underlined the growing importance of China to the burgeoning global EV industry, Tesla also said it had started selling locally made Model Y sport-utility vehicles (SUV) and will deliver them to customers this month.  

The American automaker is searching for a design director in China, part of efforts to open a “full-function” studio in Shanghai or Beijing and design electric cars tailored to Chinese consumer tastes, sources say.

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Tesla’s human resources managers, as well as several headhunters, have been trawling the industry over the past four months, according to three people with knowledge of the matter. 

They are looking for “bi-cultural” candidates with 20 or more years of experience who are familiar with Chinese tastes and can bridge the gaps between China and the United States, they added.

Biggest market

Some candidates have been interviewed by Tesla’s global design chief Franz von Holzhausen, according to the people, though it was not clear how many potential candidates had been approached by the company and recruiters.

All three sources spoke to Reuters on condition of anonymity due to the sensitivity and confidential nature of the matter. 

Tesla and von Holzhausen did not respond to emailed requests for comment.

China is the world’s biggest auto market, plus the largest for all-electric vehicles (EVs) with sales volumes expected to reach roughly 1.5 million this year, according to consultancy LMC Automotive. It is also Tesla’s No-2 market after the United States. 

Tesla faces growing competition from a slew of Chinese brands, which are growing market share and expanding overseas. Nio, which also competes with conventional premium automakers including Daimler AG and BMW, may make mass market products under another marque, its chief executive said.

“As EV technologies advance and battery cost lowers, it is possible that we may enter the massive market, but definitely not with the Nio brand,” chief executive William Li said Sunday.

Nio did not immediately respond to a request for further details. The company is delivering three SUV models built at its Hefei plant, which are mostly priced above 300,000 yuan ($46,200).

Nio launched its first sedan model on Saturday as it eyes a greater share of the world’s largest car market. It delivered 43,728 vehicles last year and has a market capitalisation of more than $92 billion, surpassing conventional automakers Daimler and General Motors. 

Tesla said Friday it had started selling China-made Model Y SUVs.

China, which offers hefty subsidies for EVs as it seeks to cut down on pollution from petrol or diesel cars, is key to Tesla’s global strategy. It is expanding its Shanghai car factory, where it also builds its Model 3 sedans. In October, it started exporting Model 3 vehicles to Europe.

It is also adding manufacturing capacity for EV chargers in Shanghai and expanding its sales and service network around the country.

Cheap model

The starting price of a Model Y in China is now 339,900 yuan ($52,092), according to its China website.

Tesla’s plans for the design studio are not fully developed, and the sources believe Tesla will probably wait for more clarity on strained US-China relations under a new US president before making a final decision on the move and all its details.

The talent search, which the sources said was mainly focused within China, fits with comments from Tesla boss Elon Musk early last year.

“I think something that would be super cool would be … to create a China design and engineering centre to actually design an original car in China for worldwide consumption. I think this would be very exciting,” he said at a media event in Shanghai.

This push might lead to a more independent Tesla China, added the person, who has spent more than a decade in the country working at design centres run by global automakers, among other places.

Chinese consumers bought around 145,000 Tesla vehicles last year, accounting for roughly a third of the company’s overall global volumes, LMC said. 

Two of the sources said one likely “China-specific” model was a lower-cost volume generator such as a $25,000 electric car that Musk referred to at a Battery Day event in September, which he said Tesla might aim to bring to market in about three years.

Musk said Tesla was confident it would be able to hit the market with “a very compelling $25,000 electric vehicle that’s also fully autonomous”.

  • Reporting by Reuters

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.

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