Elon Musk, chief executive of leading electric vehicle maker Tesla Motors, now the fourth largest car maker in the United States, has said he expects to be making cars in China in the next three to four years.
Mr Musk made the remarks as he prepared to begin deliveries of the Tesla Model S electric vehicle in China.
The company is also building a “big” network of battery-charging stations in China, including superchargers in Beijing and Shanghai, the billionaire CEO said at a packed Geekpark Conference in Beijing.
Bloomberg newsagency reports Mr Musk was scheduled to host an event today to mark the beginning of Model S deliveries in the country.
“At some point in the next three or four years we’ll be establishing local manufacturing in China,” Mr Musk said.
“China is very important to the future of Tesla. We’re going to make a big investment in China in terms of charging infrastructure.”
Local production in the world’s biggest auto market would allow Tesla to sell cars at cheaper prices by avoiding China’s 25 per cent import tariff.
While entering the country presents an opportunity for Tesla to sell as many vehicles there as in the US by as soon as next year, Mr Musk, will attempt to accomplish what the Chinese government has struggled to do: get people to buy electric cars.
“I think they can sell quite a few here in the market,” said Finbarr O’Neill, president of J D Power and Associates.
“There’s a lot of talk about Tesla but you know, their numbers are not huge.
“Mr Musk has been successful in many fields. I wish him luck, but there’s a limit to every market.”
The Model S, when equipped with an 85 kilowatt-hour battery, will be priced from US$118,000 in China, compared with about US$71,000 in the US before federal tax credits, as shipping charges, value-added taxes and import duties increase the price tag.
Tesla has said it wants the vehicle to qualify for China’s electric-car subsidies to help offset extra costs associated with selling in the country.
Bloomberg reports the company is starting deliveries as the world’s biggest carmakers gather in Beijing to display their latest models at the annual China auto show that opens to the public this week.
Tesla didn’t participate in yesterday’s media day at the show.
Tesla has been taking orders since August and opened an 800-square-metre store in a Beijing shopping mall late last year to showcase its vehicles.
Competing carmakers are watching Tesla’s entry into the country closely.
China lags behind its target of five million alternative energy-powered vehicles by 2020 as a lack of charging stations and high costs deter buyers, even as air pollution worsens and chokes its inhabitants.
Beijing’s license-plate lotteries underscore the extent of the challenges carmakers have luring electric-car buyers in China.
While the city received more than 90 bids for each available permit for a conventional petrol car in a February drawing, there were only 1428 applicants for 1666 new-energy vehicle plates offered, the municipal government said.
The fourth-largest US carmaker aims to increase global sales 56 per cent this year to 35,000 Model S cars. T
he company’s assembly plant in Fremont, California, is big enough to produce 500,000 vehicles a year.