A large number of Chinese Tesla drivers are suffering from buyers’ remorse. For starters, their cars are being delivered months after the promised date and after sales service has been spotty. The biggest problem, however, is that most of them are suffering from what’s known as “range anxiety”. Due to the scarcity of charging stations in China, most drivers 
are too afraid to run out of electricity to venture far from their homes.
The Chinese market once looked very promising to Tesla, however, there are certain aspects of the company’s car that are currently incompatible with Chinese consumers. For starters, wealthy Chinese like being chauffeured, yet the standard Model S offers a back seat with bench like configuration that screams anything but luxury. Additionally, some apps that are widely used by the Chinese consumer, such as QQ music and Xiami aren’t loaded into the car’s operating system and the navigation map is unpopular and not the widely used ones from companies like Baidu or Gaode.
Despite all the difficulties Tesla is facing, the company is slowly adapting to the demands of the Chinese consumer. Based on customer feedback, Tesla introduced “executive rear seats” as a $2,000 option. Leather-wrapped, they include two zone heaters; passengers also can use a smartphone to control media, climate and panoramic roof settings. Tesla is also recognizing the need to offer its Chinese customers the apps they have gotten used to using every day. “There are some features that we don’t have in China yet, but they’re coming,”
Dan Hsu, the manager of Tesla’s China training program, a Shanghai store and one other said. “That’s one of the great things about our platform, is that it’s all available via software upgrades. We want to innovate as fast as possible.”
In the short term, Tesla’s biggest challenge is persuading potential customers they needn’t fear running out of electricity between charges — an understandable concern in a nation where traffic jams can last hours in big cites. To affress that concern Tesla is offering Chinese buyers the home wall-charging unit for free and starting this year Tesla is paying for the installation, too. In another effort to ease range anxiety, Tesla is handing out mobile connectors that allow drivers to use any outlet. “It’s a really slow charge, but it’s just an ease of mind kind of thing to keep with them,” Hsu said. “If they need to, they can find a plug anywhere and plug in and get a charge.”
Like every technology that was ever introduced in every country, Tesla vehicles have yet to fully adapt to the Chinese market and vice versa. In the long run, however, Chinese consumers and local governments will be unable to ignore how Tesla car’s can help China solve it’s air pollution problems. Additionally, Tesla’s cars offer drivers independence from the very volatile oil markets.
Source: http://www.bloomberg.com/news/articles/2015-03-29/musk-reboots-tesla-china-strategy-as-range-anxiety-crimps-sales
Image 1:http://www.sfexaminer.com/sanfrancisco/tesla-delivers-first-china-cars-plans-expansion/Content?oid=2778123
Image 2: http://www.myteslablog.com/2014/10/first-picture-of-new-tesla-model-s-seats.html
Tesla always interests me in the context of its patent strategy. Normally, a company with such a technologically rooted competitive advantage would be incredibly worried about Chinese firms poaching their technology. Tesla’s open patent policy partly seems like a wink to other firms: this is how we do it, but just go ahead and try to replicate it. I wonder what Chinese auto firms’ responses have been to this policy and whether major obstacles in Chinese electric car adoption have mitigated their interests.
What about Tesla is innovative?? Electrics cars have been around for over 110 years. The real differentiator is that someone was willing to spend the money without having to worry about whether the car would sell. Everyone in the auto industry has lots of patents. Most of them are either defensive or never used.
The range anxiety problem among Chinese consumers interests me. It would seem logical to not a buy an electric car if you are worried about running out of battery. If charging stations become more commonplace there is only room for expansion. We have to remember that Tesla is a young brand, so the small tweaks that they must make to appeal to larger consumer base shouldn’t be too concerning.
China is definitely one of the biggest consumer target for Tesla considering the country’s air pollution and a large number of population with strong purchasing power to afford the product. However, I’m not sure home charging unit plan is viable in long term because unlike U.S. Chinese usually do not have personal garage to set up home charger. Also, Chinese buyers of Tesla would interpret 30% job cuts of Tesla China as a sign that there is something wrong with the company. It is being suggested that media-created bubble of the brand is about to burst in China.
I would argue unrealistic — goals for China may please Wall Street enthusiasts firstly, but will surely disappoint later, as it already seems to be doing in Tesla’s case. Only when Tesla charts a more realistic China course will it be in a position to go about the very important, and very serious, job of building a highly qualified local management team in the country. In the end, companies that succeed in China are those that build solid local management teams over the long term. This cannot be done when managers are given goals that are simply unattainable.
Tesla hasn’t exactly been a success in the US: last month they reported an estimated 1,200 in sales for a market share of 0.0078%. I see no evidence that with time they’re becoming better established in the marketplace. They weren’t the first electric car company in China, either – BYD was (with Warren Buffett as an investor). They’ve not done well either.
In the wider context, whether an electric car cuts down on pollution depends on how the electricity is generated, and whether manufacturing one and is more or less polluting. In regions in China using dirty coal in old plants, a gasoline car is less polluting than a Tesla.