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Speculation: Tesla selling backstock on Singles Day

( Updated: 2014-11-06 18:26

US electric carmaker Tesla Motor's recent decision to open a flagship online store on Alibaba's e-commerce platform Tmall have raised the possibilities that the company is selling its overstocked cars in the Chinese market and that the company's electric vehicles have lost their appeal in the country, the National Business Daily (NBD) speculated on Wednesday.

Tesla opened its online store last month in order to join in the Nov 11 Chinese online shopping extravaganza known as "Singles Day".

Tesla told National Business Daily that the company is offering 18 vehicles ready to ship to customers in China within five days.

The NBD speculates that 18 ready to go vehicles are part of Tesla's backstock in China with some of the vehicles possibly being returned by customers in China. Under Tesla's direct sales model, a Chinese customer will have to wait 3 to 4 months before they receive their customized vehicles. Tesla vehicles are manufactured at the company's US headquarters and shipped back to China.

According to the NBD, Tesla has admitted that they have a backstock of cars in China, but that the vehicles were imported from the US and come with standard features. The cars were meant to be emergency replacement vehicles for Tesla car-owners.

Statistics from the China Automobile Trading Co. Ltd show that there is an overabundance of Tesla vehicles had largely exceeded its demand in China. Over 3,500 Tesla's cars were imported into China in the first three quarters of 2014 and in contrast, only about 1000 of them were finally licensed, the National Business Daily reported.

Tesla said that there is a transitional period after the vehicles were imported because it would take some time to build charging facilities and time for owners to have their cars licensed. The company also says that the gap between the imported and the licensed cars is possibly a result of speculators flooding the market when Tesla entered China.

Car salesman surnamed Zhang, one of the speculators, told NBD that he ordered 100 Tesla electric vehicles to sell to other customers. However, he said people's attention on Tesla has dropped a lot and he had to sell the cars at even lower prices than expected. Zhang said that he has to sell the ModelSP85 electric car for 10,000 yuan ($1,635) less than Tesla's official price.

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