Tesla Motors, Inc. (Photo : Reuters)
Elon Musk's Tesla would be killing three birds with one stone with its plan to manufacture electric cars for the Chinese market in China. Musk, at a forum in Tsinghua University in Beijing, disclosed that by producing vehicles in the country, it would mean Tesla cars would cost one-third less for Chinese motorists because shipping cost is removed as well as import duties are avoided.
Musk estimates that Tesla could start manufacturing electric cars in China in two years, reports CNBC.
That means if Tesla would build a car similar to Model S and mass manufacture it in the south Asian giant, at current price of $106,000 for the car, a one-third price cut would translate into almost $35,000 cut. That means the selling price of such a model in China would go down significantly to about $71,000.
Making the car more affordable is just one bird. The second bird would be cutting China's worsening air pollution problem caused by vehicles running on fossil fuels which emits carbon dioxide. By making more electric cars available in China, Tesla would help cut pollution in major cities such as Beijing and Shanghai and help improve the health of resident.
The third bird is opening the more than 1 billion-strong Chinese market which spell profits for Tesla. Musk reckons that by 2030, more than 50 percent of the newly made vehicles globally would be powered by electric batteries and not fossil fuel. He projects the largest slice would be the Chinese market.
Currently, China is the biggest car market as more Chinese become affluent. In 2014, almost 20 million cars were sold in China, reports The Wall Street Journal.
