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Tesla plans to add charging network in China

The Tesla P85+ all electric car and its charging station are displayed at the North American International Auto Show on January 14, 2014 in Detroit. Photo: AFP

Electric car maker Tesla Motors Inc. is looking to develop a network of no-fee charging stations in China that would allow owners of its cars to travel long distances, such as between Beijing and Shanghai.

Diarmuid O'Connell, Tesla's vice president of corporate and business development, said the company has recently started taking steps to make the network a reality. He declined to say when the stations might be available.

Palo Alto, Calif.-based Tesla is developing a similar network in the U.S., where customers of its Model S battery-powered sedan will be able to drive from coast to coast free of charge using a network of superchargers. The company also is working on a similar network in Europe.

Separately, Tesla said it delivered 6,900 Model S electric sedans in the last three months of the year, 20% more than the estimate it gave when it reported its third-quarter earnings in November, said Vice President of Sales Jerome Guillen.

The news sent Tesla shares up nearly 16% to $161.25 in 4 p.m. trading on the Nasdaq Stock Market.

Speaking at the North American International Auto Show, Mr. Guillen said the company would double the number of sales and service locations globally in 2014. "What's in for 2014? Growth, growth and growth," Mr. Guillen said. "It's relentless growth—it's how fast can we grow."

If it comes to fruition, a Tesla charging network in China would represent a major achievement. The Chinese government has been pushing electric vehicles as a solution to the country's auto-pollution woes. But it has been largely unsuccessful mainly because of the difficulties of setting up charging infrastructure.

"We're beginning to speak with the folks that we need to speak with," in China, said Mr. O'Connell, citing property owners and electricity providers as examples. He is confident the company could overcome any potential problems associated with setting up its supercharger network in China.

"Every market has its peculiarities," he said, noting the recent experience Tesla gained in the Netherlands, Germany, Austria and Switzerland. "We have a lot of experience with the heterogeneity of the problem."

Providing a supercharger network isn't necessary for driving a Tesla in China, he said. Customers there could still charge their cars at home or by using public infrastructure, he said.

Tesla isn't a threat to China and its plan to become a leader in new energy vehicles but instead sees itself as an opportunity, Mr. O'Connell said.

"I completely respect the desire of the national, provincial and city governments to support local manufacturers and to get a domestic industry going and if that's in EVs then all the better," said Mr. O'Connell.

Tesla currently has one showroom and one service and sales point in Beijing and has plans to expand "aggressively" with Shanghai as the next target. "We're very anxious to get broad distribution," he said.

Chinese buyers can order the Model S and coming Model X version of the Tesla by placing a down payment of 250,000 yuan, or around $41,000. Delivery of the Model S is scheduled for around the end of March.

He said the company had seen a "tremendous" response in China from a "progressive cadre of folks who are making reservations sight unseen, pricing unknown," he said. Tesla hasn't yet announced its pricing for China.

Tesla didn't see Chinese electric-car maker BYD Co. as a competitor. "We don't compete with EVs. The car was designed to compete with other vehicles in its class such as the BMW 5 series or the Mercedes E-class or S-class," he said. "As far as I know, no Chinese EV manufacturer has got anything in our segment," he said.

Tesla's strong fourth-quarter sales gain comes after its third-quarter deliveries disappointed some analysts because of capacity constraints. The company has said its operating profit for the fourth quarter would be about the same as the third quarter. It posted a net loss of $38 million in the third quarter.


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