Tesla Shifts Gears to Send Model X SUVs to China Before Europe

Tesla Model X Review: Electric Luxury
  • Signature Red model orders begin in time for Chinese New Year
  • Company to start delivering SUVs in market in second quarter

Tesla Motors Inc. has started taking orders for its Model X in China with deliveries to begin in the second quarter, giving customers in the world’s largest auto market access to the new sport utility vehicle before it debuts in Europe.

The electric-car maker, which announced the China schedule on its website there Tuesday, also said it will offer a limited edition Signature Red version of the Model X P90D for about 1.48 million yuan ($225,000). Red is the color of celebration in China, where the Chinese New Year begins Feb. 8. The price range for the standard 90D will be about $146,000 to $178,000, with a $15,000 reservation fee required, according to the website.

Tesla, whose China rollout for the Model S sedan got off to a rocky start, wants to take advantage of the nation’s hot market for SUVs, particularly luxury models. About 21 million light vehicles were sold last year in China, where German brands such as Audi, BMW and Mercedes-Benz dominate the premium segment. With the Model S, Tesla began deliveries in key European countries in 2013 and to Chinese customers in April 2014.

“This is Tesla’s opportunity to establish the brand,” Michael Dunne, a strategic adviser on the Asian auto market, said in a phone interview. “Tesla’s success in China will hinge on its ability to establish that it is a distinctive, alluring and exceptional brand to own. With the Model S they struggled.”

Filter Focus

The Tesla Motors Inc. Model X sports utility vehicle.
The Tesla Motors Inc. Model X sports utility vehicle.
Photographer: David Paul Morris/Bloomberg

The statement on the Tesla website focuses on safety and the Model X’s high-efficiency particulate air filter, which seeks to block contamination from polluted air as well as bacteria and viruses. Smog from vehicle emissions and coal-fired power plants has made pollution a big issue in cities such as Beijing, where “red alerts” are issued when the air quality is particularly bad.

“For affluent, educated urban dwellers, air quality -- for themselves and their children -- is a big priority,” Dunne said.

Chief Executive Officer Elon Musk introduced the SUV at a splashy event in Fremont, California, in late September. With a backlog of thousands of orders, the company went on to deliver 208 Model Xs in the fourth quarter, less than half the 507 it built and below some analysts’ projections. Tesla has said that as production increases, it will “prioritize quality above all else.”

Tesla reported deliveries of 50,580 vehicles in 2015. The Palo Alto, California-based company doesn’t break out sales by region.

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