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Why Elon Musk claims Tesla was ‘misled’ in China

Published Mar 31st, 2015 6:15PM EDT
Tesla Model S China

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For as admittedly great and revolutionary as the Model S is, Tesla’s luxury sedan hasn’t performed all that well in China. From regulatory hurdles regarding supercharger rollouts to practical considerations such as dense urban populations, there have been no shortage of explanations seeking to pinpoint why Tesla just hasn’t been able to crack the Chinese market in a big way. Indeed, Tesla last month was forced to announce job cuts in China on account of less than stellar sales.

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Now comes word from Tesla CEO Elon Musk himself that the company may have simply fallen prey to wildly optimistic expectations on account of local speculators who artificially inflated the “demand” for Tesla’s award winning sedan.

Tesla had been “misled” by Chinese speculators into believing that demand for their vehicles was “extremely high”, leading to an excess of inventory, Musk said during a visit to China, where he attended the Boao Forum in Hainan province.

Many orders were not placed by genuine buyers, but resellers who cancelled when the cars arrived, the official news agency Xinhua reported, quoting Musk.

Musk added that China is the only country where Tesla has excess inventory. Indeed, in every other country Tesla does business in, it’s struggled to keep pace with booming demand.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.