Hong Kong is Geared Up for Tesla (TSLA), But Will China Follow Suit?
Bloomberg reports that Tesla has received over 300 reservations for its Model S sedan in Hong Kong, with deposits ranging from $5,000 to $42,500. That comes before the company has stamped a price on the auto, which starts at $62,400 in the U.S.
If reservations in Hong Kong are any sign, other markets in China should fare as well, leading to big success for Tesla.
Challenges in China include just 168 charging stations spread throughout the country at this point, meaning a lot of potential customers might be afraid that they would run out of charge before reaching home. Hong Kong should be an issue given that it is less than 10 miles wide and the island entity has about 1,000 charging stations in malls and parking lots. Moving to China will require a new Supercharger setup like in the U.S.
Hong Kong also had just 300 electric vehicles (EVs) on the road last year, versus 500,000 gasoline-powered vehicles.
Benefiting Tesla will be China's government supporting the electric car market. The country has a goal of having 5 million EVs on the road by 2020, but sales of just 12,791 units in 2012 mean that there is a long way to go. Subsidies of $9,800 or more per vehicle lapsed last year and haven't been renewed yet.
Though the Model S is the stand-out in electric vehicle luxury, Tesla will do at least one modification before introducing the vehicle in China. Because so many wealthy Chinese have drivers, Tesla said it will make the backseat more luxurious to drive sales.
Shares of Tesla are indicated higher Friday morning.