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Tesla Brand Positioning in China

Liang Zhou
Current General Manager, Procurement and Supply Chain, SAIC General Motors Corporation

Learning outcomes

  • The brand positioning and consumer pereception of Tesla in China

Executive Bio

Liang Zhou

Current General Manager, Procurement and Supply Chain, SAIC General Motors Corporation

Liang has been working on the ground in the Chinese automotive market for the last 20 years at various different Chinese Joint Ventures with Western automotive companies. He began his career as a Purchasing Manager at Changan Ford Automobile, the JV between Changan and Ford. In 2012, Liang joined General Motors China as a Global Procurement and Supply Chain Manager. He is well connected with OEM's, Tier 1 suppliers and also larger dealer groups in China which proves invaulable given how opaque the market is to Westerners.Read more

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Interview Transcript

Can we move on to discuss Tesla. What developments are you seeing, in consumer awareness and behavior, around the brand of Tesla?Actually, in China, the Tesla brand has good performance. If you think about this brand, from the Chinese consumers, they think positively about it. As you know, their localization in China, normally their price is much higher. But since the end of last year, they have a factory in Shanghai and their price has decreased a lot, approximately 20% or 30%, compared to the imported Tesla. Therefore, the Chinese customers, they think that this brand is good.But in the meantime, there are also some other new low energy vehicle brands in China, such as the Chinese own brand of the low energy vehicle. They also have strong competition with Tesla. In China, the consumers will compare not only on the price, but also the performance of each brand, each type of low energy vehicle. It’s similar to the bucket of the total industry, where it is getting stronger, with more fierce competition, for the low energy vehicles.How is Tesla differentiated from the Chinese electric vehicle brands?Normally, it’s per miles, after each charge. It is higher compared to the Chinese local brand. I think it’s mainly due to the battery and also, the control on the electronic system, for the battery management. This is an advantage, compared to the Chinese local brand. Normally in China, the local brand, they don’t have this high average, per charge, of the battery.So Tesla are building a new factory in Shanghai. Obviously, it has been well-documented in the press. Do you think that the Chinese consumer would be willing to pay less for the Teslas manufactured in Shanghai, versus in the US or Europe?Yes, this is their strategy. They have set up this new facility in Shanghai. The purpose is that their new product, produced by this Gigafactory, they will sell to the Chinese market. They price will be around 20% or 30% lower, compared to the same types that they produce in US. This is Tesla’s strategy, for their localization in China, to attract the Chinese customers.How much cheaper will it be, compared to the Chinese EV brands?
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