Falling sales in China jolt Tesla shares

Shares of Tesla Motors Inc may have tumbled Wednesday on slowing sales in China, but the picture is not as bleak to some who follow the electric-car maker's future there.

"I believe that electric cars will take off when technology gets better and gas stations can also charge cars," Stanley Kwong, a professor of international marketing at the University of San Francisco, told China Daily.

Shares of Palo Alto, California-based Tesla fell 5.7 percent to close at $192.69 in New York trading on Wednesday, their largest one-day drop since Oct 27.

Tesla CEO Elon Musk said Tuesday at the Renaissance Center in Detroit, site of the North American International Auto Show, that sales of Tesla's electric cars in China were "unexpectedly weak" in the fourth quarter of 2014. Musk blamed misconceptions among Chinese consumers about the difficulties of recharging the vehicles.

Musk, in an interview with Bloomberg News, described China as "a wild card that seems to change for reasons we don't understand".

But June Jin, vice-president of Tesla China Communications, said in an e-mail to China Daily that Tesla sales in China were "OK" during the quarter, but "not as strong as we had expected". Jin declined to disclose the sales figures.

Tesla already has expanded the charging network rapidly in China, Jin wrote.

"To date, besides the home charger that all customers receive when they buy a Model S, they can charge at our network of 200 Superchargers and 800 destination chargers in China," he told China Daily. "The number will keep growing as we continue to partner with Chinese companies such as China Unicom, China Merchant Bank, China Minsheng Bank, and so forth, to build charging facilities nationwide," Jin said.

In August, Tesla China struck a deal with China Unicom, a leading telecommunications company in China, to build 400 charging outlets at China Unicom retail stores in 120 Chinese cities. The company launched a strategic cooperation with China Minsheng Bank in October to build at least 200 destination charging stations in 20 Chinese cities.

Even though the automaker has already made a major investment in China by building more charging infrastructures throughout the country, experts still expect more.

Kwong, who worked as the worldwide program director of IBM for more than 30 years, said there are customer concerns about charging facilities: "Whether it is in California or China, most people are looking at an electric car only as a second or third vehicle because of its range and the lack of charging facilities.

"The city of Beijing has announced that they would build 30 charging areas in 2015," Kwong said. "However, it is still way too few for someone who depends on driving."

Kwong believes the electric car is vital to reducing air pollution in China. Tesla also faces fierce competition in China. Chinese Internet company Leshi Holding, which started with the content streaming website LeTV.com, announced in December that it would enter the electric car business.

He Yi, CEO of Leshi's Le Telematics Co, said the new product, called "smart super electric vehicle", could surpass those from Tesla.

He said a joint investment with domestic carmaker Beijing Automotive Group Co was made in American company Atieva Inc, a new-energy company in Redwood City, California, last summer.

zilian@chinadailyusa.com