Adding to news of Tesla’s teething problems as it attempts to proffer its Model S in China’s EV-friendly, but unique market, insiders report hundreds if not up to over 2,000 cars sit unsold as Tesla continues to try to find its way.
Company head Elon Musk has been reported as tough on employees, possibly less than sufficiently sensitive to Chinese culture, and the Model S may not be ideal for wealthy Chinese buyer tastes among other issues.
Chinese media report out of 4,800 Model S sedans shipped last year, as many as half are “languishing” unsold reports International Business Times.
Approximately 200 out of around 600 total Tesla employees are being laid off and Musk has admitted the Model S is not selling as well as expected, but has not divulged as much as Chinese media and other sources have, which are the basis for IBT’s report.
“Musk is coming on too strong, and he will not compromise on the Chinese market,” said a Chinese Tesla sales executive to Chinese-language website DoNews as he prepared to leave his job. “He’s too impatient. Managers must meet his expectations and standards or leave. Tesla’s management division in the Chinese market has had insufficient clarity and unity. … The Chinese management’s right to speak is almost zero.”
Accusations have gone forth in return by Musk, who said Tesla employees are not doing a good job selling the EV, and issues surrounding it.
“This sounds kind of brain dead, but our sales team was telling people that it was difficult to charge in China,” he said Feb. 11. “Even though this is not true, like that is pretty silly.”
Tesla did get positive press for itself when it announced it would not gouge in any perceptible way on the price of the Model S in China. The company must pay heavy import duties and tariffs to get the California-built cars to China.
Instead of trying to add a further profit surcharge, Tesla said it wished to only pass along actual costs and otherwise price the Model S near what U.S. equivalent prices would be. This was intended as a refreshingly lax counterpoint to the practice of other high-end manufacturers which instead add profits for China’s newly upscale buyers to pay.
But Tesla is having problems with payments anyway. An anonymous source was reported by Guancha.ca that some cancellations are due to issues with Tesla’s policy of two deposits for down payment.
The first deposit was initially set at $2,400 equivalent on the $103,000 base price car, second is $40,000 which has proven tough to collect. Later Tesla raised deposit number one to $8,000 to discourage cancellations.
Another issue in adopting the California car to a land far from its origins is back set space. Well-off Chinese are fond of sitting in the back seat and being chauffeured. The Model S is not exactly tight in the back seat, but is shorter than other upscale cars on long wheelbases specially tailored for the Chinese market.
What other issues besides these are at play is unclear, but that Tesla is determined is. It has a reported 60 Supercharger locations in the country, and China is very pro-EV and to be sure, the Model S is a global standout.
It would appear more will need to be done however as Tesla adjusts its policies, procedures, staffing and continues to find its way.