Tesla Lobbies Obama To Make It Easier To Operate In China

According to a report from the Wall Street Journal, Tesla is asking the Obama administration to pressure Chinese President Xi Jinping into making it easier for American automakers to operate in China. Although Tesla has struggled to increase its sales in China, the company is hoping to change that with the U.S. president’s assistance.

Tesla’s move comes as several new Chinese-backed electric car startups are emerging in the U.S., presenting the potential of a new wave of competition for Tesla. However, foreign carmakers who want to assemble vehicles in China must take on a Chinese partner, which presents them with challenges in operating there, and puts them at a disadvantage in comparison to Chinese companies that are operating in the United States.

“The China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face,” said Tesla representative Ricardo Reyes. “The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, puts American car companies at a significant disadvantage.”

The White House hasn’t yet offered any comment.

Tesla certainly seems to be acting on the premise that it will be facing stiff competition in the near future from the increasing number of local Chinese companies that are planning to release electric cars in the next few years. One such firm is Leshi, owned by billionaire Jia Yueting, which aims to unveil an electric car at the Beijing motor show next year. Additionally, the Chinese government is providing incentives for companies to develop electric cars in an effort to increase the sales of EVs, as part of a range of measures that it is using to try to alleviate the country’s serious air pollution problem.

Tesla may also face competition from the Youxia X, which is expected to be priced between $32,200 and $48,300, and has the potential to rival the upcoming Model 3. The Youxia X bears a striking similarity to Tesla’s Model S sedan in its design.

It’s no secret Tesla made a weak start in the Chinese market. The company failed to reach its target of getting a third of its global sales from China in 2014, and it sold only 2,499 Model S cars there last year, out of its 31,700 worldwide 2014 sales of the model. However, in the time since its slow debut in the country, it has managed to make progress and now commands 80 percent of imported plug-in hybrid and electric vehicle sales.

Will Tesla continue to increase its market share in China, or are the country’s newest electric car innovators about to take full control?