Bottom line: The resignation of Tesla’s China president hints the company is getting off to a slow China start.
US new energy superstar Tesla (Nasdaq: TSLA) suffered a setback with the departure of its China president. The news will disappoint the company’s overseas boosters and electric vehicle (EV) fans in general, and hints that this new energy superstar’s drive into China isn’t going as smoothly as hoped.
Tesla had extremely high hopes for China created by its charismatic chief Elon Musk. The latest headlines say Tesla’s China President Veronica Wu, or Wu Bixuan, has resigned after just 9 months on the job. (English article; Chinese article) Tesla declined to comment further on Wu’s departure, but one analyst said the move may reflect slower than expected progress in developing the China market.
That shouldn’t come as a surprise to anyone if it’s true, as Musk has built up huge expectations for his company in China since Tesla delivered its first vehicle in the market back in April. That sale came after Tesla cleared up a messy trademark dispute, which was just one of the many problems it will face likely face in the huge but difficult China market.
The other bigger problem it’s facing is infrastructure, which is one of the few points that the company addressed in its most recent quarterly report. Tesla has announced a steady string of tie-ups to build new charging stations in China with various local partners, but only had 23 supercharging stations in the country at the end of the third quarter, according to its report. (company announcement)
Tesla is undoubtedly working hard to build many more such fast-charging stations in China, and most of the partnerships announced so far are for hundreds of slower-charging stations. Still, the latest quarterly report contains no mention of China sales, hinting there’s not much good news to tell. Previous reports had indicated Tesla hoped it could sell up to 8,000 vehicles in China this year, and back at the beginning of this year Musk was saying Chinese sales could match US levels as soon as 2015.
This abrupt resignation of its China president after such a short period certainly hints that none of those plans are progressing as quickly as Musk would like. Finding a new China president to execute his vision will probably take at least a few months, meaning Musk is unlikely to see his China dream realized until 2016 at the earliest.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.