Tesla delivered its first mass-market Model 3 from its Shanghai factory to Chinese customers on Tuesday, turning the screw tighter on foreign carmakers as they struggle to make the switch to electric in the world’s biggest auto market, reported the Financial Times.
With the axing of generous subsidies for battery-powered cars and ambitious targets to increase them on the roads, Tesla’s move has intensified the dilemma for auto groups over whether to ramp up electric plans or hold off until the market improves.
China’s car market was on course for a second year of sales declines in 2019 after shrinking for the first time in three decades in 2018. Some analysts think Tesla’s factory, the first fully foreign-owned car plant in the country, is a competition “game changer” in the electric market as it puts pressure on traditional groups to offer high-quality battery-powered models to Chinese consumers.
“Before [Tesla’s factory] was approved, the traditional manufacturers’ attitude was wait and see, because the investments are huge and they don’t want to make the first move,” said John Zeng, an analyst at consultancy LMC Automotive. “Then, they realized that Tesla was coming. They realized their competitors are here.”