IF THERE’S ONE place you can knock the Tesla Model S, a carso good it “broke” Consumer Reports’ rating system, it’s cost. The electric sedan is crazy expensive, starting at $71,000 and topping six figures fully loaded. The Model X SUV unveiled last month runs $143,000 decked out with a nice trim package.
To temper its elitist image and lure more consumers, Tesla promises to launch the smaller, more affordable Model III in 2017. CEO Elon Musk hopes the car’s $35K sticker price sends a positive message to investors and critics who question the company’s long-term potential for profitability and growth. After all, it’s one thing to sell 50,000 cars a year to rich people. It’s quite another to sell hundreds of thousands of cars to those who are merely well off.
In China, though, where non-union labor remains cheap, supply chains are as supple as they are massive, and attitudes toward intellectual property are quite lax, some aspiring auto barons think they can undercut Tesla by, well, ripping off Tesla. These brash entrepreneurs plan to build near carbon copies of the Model S and sell them for significantly less than the real thing.
Tesla isn’t alone in fighting counterfeiters. Land Rover tried and failed to stop a Chinese firm from producing a mirror-image of its popular Evoque SUV. But those looking to crib from Musk are aided by the fact Tesla made much of the technology underpinning the sedan open-source. And demand for EVs is mounting. The exploding market for automobiles raises grave concerns about air pollution and climate change, which is why Beijing wants to see five million “new energy cars” throughout China by 2020. Tesla’s at a disadvantage there, because its cars are subjected to high taxes in China and aren’t granted the same tax breaks awarded to home-grown EVs.
Musk is eager to expand in China, but may well fall victim to the clone war.
Meet the Clones
The Tesla clone that may have the best chance of making it past the concept stage is dubbed Le* Car. (The car was cribbed from Tesla, and the name, perhaps, from Renault.) It is a side project of LeTV, a wildly successful streaming subscription service that Bloomberg News called “the Chinese Netflix.” It was conceived by Jia Yueting, the billionaire behind China’s top-selling smart TV and a phone that sold 200,000 units in the first few seconds of its release. Le* Car is perhaps best described as a Model S with European hypercar styling, and it’s slated to debut at the Beijing auto show in April.
The teaser sketches are frustratingly vague (what, no side mirrors?) and heavy on the chiaroscuro, but there’s reason to believe the Le* Car is for real. Tony Nie, the founder of Lotus Engineering in China, is leading the project, and he’s hired a team of 600 to develop the car. Some of the talent reportedly was poached from companies like General Motors, BMW, and Tesla.