Tesla’s Vision in 2015: An Interview with Head of Tesla China – Tom Zhu

At the end of 2014, Veronica Wu, the former President of Tesla China, resigned from her position. Ms. Wu is succeeded by Tom Zhu, who at that time was responsible for the Supercharging network development in China.

Last week, Chinese media GeekCar interviewed Mr. Zhu, they discussed some hot topics that Tesla owners in China are currently focusing on. Below is highlights based on the above interview report.

Q: Tesla’s 2014 4th-quarter financial report did not reach some analysts’ expectation, what is your opinion?

A: It is obvious the numbers in the financial report are not good. But there are multiple reasons: 1. investments in the Gigafactory; 2. preparation for the Model X production affects Model S delivery; 3. expense in building the Supercharger network with 400% expansion in 2014; 4. cost in setting up new manufacturing/assembling plants; 5. continue upgrading the Model S; 6. new model R&D. We spend money on necessary places, and hope to provide an ultimate experience for our customers.

Q: What is the real purpose of the Gigafactory?

A: During an internal meeting, Elon Musk said that factory’s ultimate purpose is “beyond the imagination”. Gigafactory is not only intended for supplying battery for Tesla vehicles, Tesla is also very ambitious in the power storage industry.

Q: From some internal emails Elon Musk has send to Tesla China employees, some people work in the company get a feeling that Musk is losing faith in the China market. Is this true?

A: Elon Musk is not interested in spreading rumors. He is an engineer, he is only interested in solving problems. What really attracts Musk is China’s future EV market, not the short-term sales figure.

Note: From our point of view, 2015 is a year that Tesla will face headwinds, majorly due to Model X’s initial delivery will not happen until late 2015. However, Musk’s vision is profound: EV markets in China is extremely important.

China is the largest country in the world that has full government support for EV projects. A lot of the government spending is on building nationwide EV charging infrastructure. Quite different from most western countries, because of the special political structure in China, the Chinese government have absolute authority and control power over all public/private/domestic/foreign companies and corporations that are operating in China. Therefore, if the government want to have something done, it can be done; and what’s more, it can be done pretty quickly.

Background information for QA #3 above: in late Janurary, Elon Musk send an email to some Tesla China senior managers, in which he claimed to fire, or demote them if they are “not on a clear path to positive long-term cash flow”. In the same email, Mr. Musk also said those managers who performed unsatisfactorily “will be asked to leave or assume a more junior role. This has already happened in China and will likely happen in some other countries, too.”

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