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Tesla goes to China – San Jose Mercury News

© Zhou Ruogu Architecture Photography — Pictured is the Parkview Green FangCaoDi structure in Beijing, China. Tesla Motors will open its first showroom in China inside the environmentally friendly structure.
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Tesla Motors (TSLA)’ all-electric Model S sedan has been well received in the United States, and deliveries have just begun in Europe.

Now Tesla is getting ready to take on the world’s largest auto market: China, which CEO Elon Musk has described as a “wild card” in the company’s future.

Tesla is in a quiet period as executives prepare for the company’s Aug. 7 earnings report, and a company representative declined to comment for this story, saying only that Tesla is likely to release more news on

A Tesla Model S sedan is seen at Lake Merritt in Oakland, Calif., on Thursday, April 11, 2013. (Jane Tyska/Staff) (JANE TYSKA)
its China strategy next month. But tidbits about Tesla’s plans have dribbled out in the Chinese media and from auto experts in Asia.
Its first showroom in mainland China, scheduled to open later this year, will be in central Beijing at the exclusive Parkview Green mall, a gleaming, pyramid-shaped plaza designed with sky-gardens and atria spaces. It is the first mixed-use commercial project in China to be certified LEED Platinum for its energy-efficient design, and Tesla’s 8,000-square-foot showroom will be roughly three times larger than its U.S. showrooms.

Auto industry analysts say Chinese consumers’ growing appetite for luxury automobiles makes it a natural market for Tesla to tackle. Roughly 19 million vehicles were sold in China last year. Luxury brands like Audi, BMW, Mercedes-Benz and Porsche are increasingly popular, and analysts say that Tesla is likely to market the Model S as a luxury vehicle that happens to be an electric one.

“China is the biggest auto market in the world, and that’s why Elon Musk is really pushing for sales in China,” said Mike Omotoso, senior manager of global powertrain forecasting at LMC Automotive in Troy, Mich. “The showroom is being built in Beijing’s equivalent of Rodeo Drive. The Model S may be a good way for the Chinese to say ‘I’m wealthy, but also environmentally responsible.’ ”

Air pollution is a notorious problem in China, and the government is a strong supporter of electric vehicles, particularly of domestic automakers like BYD and Kandi. And a December report by McKinsey & Company found that spending by Chinese consumers on luxury products, from jewelry to clothing and cars, now exceeds that of any other country, including Japan.

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