Tesla is no 'Apple of the car industry', say Chinese state-owned carmakers

PUBLISHED : Wednesday, 09 April, 2014, 10:09pm
UPDATED : Tuesday, 24 November, 2015, 12:03pm

When asked whether the cutting-edge electric carmaker Tesla Motors may be a game changer in the global car industry like Apple was to the mobile phone industry, Chinese state-owned carmakers shrugged off such comparisons.

Xu Heyi, chairman of Beijing Automotive Industry Holding (BAIC), one of China's leading state-owned carmakers, answered very succinctly: “Impossible”.

Xu also asserted that Tesla boss Elon Musk was not about to become the next Steve Jobs. “[I’m] certain about that,” he said at this year’s Boao Forum for Asia, an annual economic conference held in southern China’s Hainan province.

California-based carmaker Tesla has drawn global attention for its dynamic approach to making electric-powered cars. Its Model S – a luxury four-door sedan with sports-car-like performance – has garnered international praise for its blend of attractive lines and powerful electric drivetrain, and is believed by many to be a product that’s reshaped the image of electric cars forever.

Overwhelmingly positive reviews from car critics helped boost Tesla’s Model S sales figures, and its stock price more than doubled from US$120.5 last November to US$254.8 per share in early March. On Wednesday, Tesla’s share price stood at US$210. Its success has also driven up the stock prices of electric carmakers in China, yet the launch of Tesla’s premium Model S in Beijing effectively dampened the future outlook of the home-grown new energy carmakers, including BAIC.

Xu said that BAIC was planning to unveil a new electric car whose performance will transcend that of Model S by the end of 2015.

Xu’s bold statement came months after BAIC in February acquired a 25 per cent equity stake in Atieva, a California-based battery developer for electric vehicles founded by a former Tesla vice-president, in a move viewed as shoring up its battery support and potentially improving the output of its currently averagely performing electric car.

Also at the forum, Chief Manager Zhu Fushou of Dongfeng Motor Group, China’s second largest carmaker, said he was also unimpressed by Tesla’s “Apple” comparison.

“Tesla set its [global] sales target at 70,000. But this is a just a fraction of the Chinese car market,” Zhu said

China sold 21.9 million cars last year, up 13.9 per cent from the year before while Tesla’s world-wide sales reached just 22,300 last year.

Electric cars, Zhu added, still require more technological breakthroughs in terms of battery costs and safety features.

This is not the first time Chinese automotive chiefs have publicly dismissed the ambitions of the American carmaker.

Wang Chuanfu, the founder and chairman of China’s top electric car manufacturer BYD Auto, had also openly disparaged Tesla’s ambitions.

“BYD could make a Tesla as soon as consumer demand for electric cars really takes off,” Wang said at a general meeting of shareholders. The electric car market, not the technology behind it, was the pressing issue facing his company, he said.

In February this year, Wang again called Tesla a “rich man’s toy”, brushing off concerns of competition from Tesla’s luxurious Model S.

BYD’s all-electric model, E6, retails at about 300,000 yuan in China before government subsidies, and its new hybrid model Qin goes for around 200,000 yuan. Both are much cheaper than Tesla's Model S, which starts at 750,000 yuan.