• Contact Us
  • About Us
  • Privacy Policy
  • Login
Upgrade
Investment.Ceo
ADVERTISEMENT
  • Daily Investment
  • Investment
  • Entrepreneur
  • Wealth
  • Subscribe
  • Courses
No Result
View All Result
  • Daily Investment
  • Investment
  • Entrepreneur
  • Wealth
  • Subscribe
  • Courses
No Result
View All Result
Investment.Ceo
No Result
View All Result
ADVERTISEMENT
Home Investment

Why China Welcomes Tesla, “The Predator” Of Domestic Manufactures?

The famous electric car company Tesla of Elon Musk was originally based in California, USA, but it seems that China is the place where this brand is most popular.

January 28, 2021
in Investment, Entrepreneur
0 0
0
Why China Welcomes Tesla, “The Predator” Of Domestic Manufactures?
0
SHARES
191
VIEWS
Share on FacebookShare on Twitter

The company’s sales in China in 2019 were 40,000 units, up 161% from the previous year. When the COVID-19 epidemic broke out in 2020, the automaker still set a sales record in March and April.

The danger of a ruler

When Tesla built its giant electric vehicles manufacturing plant Tesla Gigafactory in Shanghai in 2018, other Chinese domestic EV manufacturers were all concerned by the arrival of an overly strong foreign rival. This seemed to go against the previous policies to encourage domestic EV development by the Chinese Government.

You might also like

What Is In The Fed Chairman’s Message That Have Disappointed Investors?

What Is In The Fed Chairman’s Message That Have Disappointed Investors?

4 days ago
235
2021 Market Will Develop in 10 Ways with Use of AI And Machine Learning

2021 Market Will Develop in 10 Ways with Use of AI And Machine Learning

4 days ago
30

The country has spent years and billions of dollars investing in domestic EV manufacturers and developing their own domestic market. How will it be beneficial to open the door to a “predator” like Tesla for domestic businesses, especially when the new Chinese policy gives Tesla the full privilege of other domestic automakers?

So what really happened after that. Will the Chinese carmakers really be destroyed? Let’s look at a typical example, that is Nio, the EV company which has a challenge that will knock Tesla out of the Chinese market.

In October 2019, the challenges posed by Tesla caused Nio’s stock price on the New York Stock Exchange to plummet to as low as $ 1.19.

But then, Nio shares had a spectacular recovery. In October 2020, its shares rose more than 1,000%, reaching $ 26.5/share. Particularly in the session on October 14, Nio shares increased 22%.

With that, optimism has returned to other domestic EV manufacturers. In September 2020, Chinese EV startup WM Motor said it had raised 10 billion yuan ($ 1.47 billion) from a group of investors led by the Chinese government-owned right after some of the company’s big rivals went public.

It is said that the Chinese insight is the ‘catfish effect’, which comes from a story that is widely quoted and discussed in China. This story tells that many years ago in Norway, there was only one captain capable of bringing the live sardines ashore after each fishing trip. His secret was putting a catfish in each sardine tank. The catfish chased and the sardines had to swim continuously to stay away from the catfish or they will be eaten. Because they were always active, they avoid stagnation due to being locked for a long time and then could live longer.

Beijing calculates that by releasing the ‘catfish’ Tesla into the Chinese market, the domestic EV manufacturers will move harder to compete and survive.

nio

A symbiotic relationship

In addition to the benefits China has for Elon Musk’s Tesla, building a factory in China also brings in a staggering amount of money. The Shanghai facility was financed almost entirely through state-controlled banks that can expect a pretty big return on their investment. In addition, Tesla also signed a land lease contract lasting 50 years, transferred directly to the Chinese government.

ADVERTISEMENT

In addition, 30% of the equipment and materials for factory construction are purchased from Chinese suppliers. In the long run, these activities will help nurture the vast supply chain expansion in this country.

Chinese policymakers recognize that the long-term benefits from developing an extensive EV supply chain in China will outweigh the short-term vulnerability that local rivals like Nio, WM Motor, and Li Auto, Xpeng Motors, BYD are suffering by the arrival of Tesla.

ADVERTISEMENT

This is similar to the fact that Apple factories process components in China, thereby helping to nurture the vast supply chain here, prompting the rising of the Chinese smartphone manufacturers such as Huawei, Xiaomi, Oppo, Vivo…

On the other hand, the presence of a famous name like Tesla will also make foreign consumers pay more attention to the Chinese EV market. As a result, domestic EV brands such as Nio and Xpeng have the opportunity to reach global consumers as “Tesla-killers”, thereby expecting to improve sales.

Universalizing EVs in everyday life

The Chinese government supports EVs in their efforts to reduce air pollution, causing demand for EVs to soar in the world’s largest market. By 2025, China aims for EVs to account for 25% of all cars sold, with Tesla potentially leading that charge.

Tesla’s bestselling Model 3 EV in China has fueled the domestic market so much that owning an EV is now a status symbol of the urban elite. in China.

Big sales will help manufacturers gradually lower the price of EVs, creating an incentive for EVs to become more popular. The prospect of such a market is the main reason that the Chinese government has supported local producers in recent months.

With such a vision, Beijing is not concerned by the latest figures showing that Tesla’s monthly EV sales in China are far ahead of its local rivals. In a way, this is part of the Chinese plan.

Tags: electric vehicleElon MuskEVnioTeslaXpeng Motors
ADVERTISEMENT

Related Posts

All You Need to Know about Trade Marketing in 2021.
Investment

All You Need to Know about Trade Marketing in 2021.

March 7, 2021
12
Five Things Advertisers Need To Know About The Newest Apple Privacy Changes
News

Five Things Advertisers Need To Know About The Newest Apple Privacy Changes

March 7, 2021
12
Something You May Not Know About The Battles Between Top Tech Giants
Entrepreneur

Something You May Not Know About The Battles Between Top Tech Giants

March 6, 2021
25
12 Easy Steps To Become A Good Financial Investment Advisor
Investment

12 Easy Steps To Become A Good Financial Investment Advisor

March 6, 2021
60
What Is In The Fed Chairman’s Message That Have Disappointed Investors?
Investment

What Is In The Fed Chairman’s Message That Have Disappointed Investors?

March 5, 2021
235
2021 Market Will Develop in 10 Ways with Use of AI And Machine Learning
Investment

2021 Market Will Develop in 10 Ways with Use of AI And Machine Learning

March 6, 2021
30

Popular Post

  • Great Businesses Ideas You Can Start for Less Than $100

    Great Businesses Ideas You Can Start for Less Than $100

    0 shares
    Share 0 Tweet 0
  • Top 10 Most Common Financial Mistakes That Keep You Poor Forever

    0 shares
    Share 0 Tweet 0
  • Fiery Red Stocks, Goldman Sachs And JPMorgan Urged Investors To Catch The Bottom

    0 shares
    Share 0 Tweet 0
  • 10 Signals That You Really Should Be An Entrepreneur!

    0 shares
    Share 0 Tweet 0
  • What Is The Real Meaning Behind Reddit’s GameStop Stock Battle?

    0 shares
    Share 0 Tweet 0

Categories

ADVERTISEMENT
ADVERTISEMENT
Investment.Ceo

We bring you the best Premium Articles that perfect for entrepreneurs, investors, finance students, etc. Check our page for details.

Learn more

Categories

March 2021
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031  
« Feb    

Recent Posts

  • Who is The New Husband of Jeff Bezos’ ex-wife MacKenzie Scott?
  • Seven Ways to Persuade Yourself to Make Better Financial Decisions
  • All You Need to Know about Trade Marketing in 2021.

© 2020 Investment.Ceo - Investment Blog by Daily Investment.

No Result
View All Result
  • Daily Investment
  • Landing Page
  • Buy JNews
  • Support Forum
  • Contact Us

© 2020 Investment.Ceo - Investment Blog by Daily Investment.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.