Electric vehicle (EV) maker Tesla Motors Inc (NASDAQ:TSLA) has high hopes connected not only with its primary domestic market, but also with a rapidly expanding international market. In Cuba however, China's largest EV player, BYD (Build Your Dreams) Group, has overtaken Tesla by securing an order of over 700 EVs from the country's tourism industry, according to Forbes.
The deal, which calls for BYD to supply 719 electric sedans to Cuba's burgeoning tourism sector, was penned Friday in Havana; after an agreement between Rodrigo Malmierca Diaz, Cuba's Minister of Foreign Trade and Investment, BYD CEO Wang Chuanfu, and Shenzhen Mayor Xu Qin.
The fleet order will be Cuba's first for rental vehicles for tourists, and amounts to BYD's largest in the country since the company first unveiled its vehicles in November last year at the Havana International Expo. BYD said the latest fleet order will include Suris, G6s, L3 sedans, the S6 SUV – which won the design award at the Havana expo in November – and the M6 multi-purpose vehicle. The company also plans to build a service center for Cubans in the near future.
Tesla, which has yet to make an entry in Cuba, will perhaps be more nimble-footed in the country. The country has a poorly-developed retail EV market due to frequent power outages, lack of charging infrastructure, and fewer green car enthusiasts who can afford a $74,000 and upward Tesla Model S.
BYD in comparison – with its seemingly more diverse range of EVs, including taxis and buses – has been able to tap into fleet demand in Cuba through securing government and industry orders.
Even in China, Tesla has some catching up to do against market leader BYD, which is backed by Warren Buffet. In addition to running a highly successful smartphone assembly business that helps garner nearly half its revenues, BYD's large range of retail and commercial EVs provide an edge that Tesla is deprived of in China.
Tesla CEO Elon Musk earlier this year made it clear that the company had missed its initial sales expectations in the country. That announcement was soon followed by some media reports claiming that Tesla's inventories in the country had inflated to record levels, suggesting the company was having a hard time finding enough Chinese customers for its upscale electric sedan. Tesla however clarified that rising inventories had in fact resulted from late order cancellations.
But as much as China is a crucial market for Tesla – in fact it's most important as per the company's own remarks – the Silicon Valley-based startup is what it is: the first successful US electric automaker startup in decades. Overall sales of the company's Model S have defied some analysts' claims that Tesla's sole model could be "ageing." The company posted a record year-over-year jump of 51% in first-quarter sales, while second-quarter sales surpassed the company's deliveries guidance of 11,000 units.
In September, Tesla plans to roll out its first electric SUV, the all-wheel-drive Model X, as well as a cheaper mass-market Model 3 sedan and SUV in about two years. Perhaps with the Model 3 line-up, Tesla would be more suited to enter some large but developing markets like India and Cuba.
Source: BYD Beats Tesla Motors Inc To Cuba's Growing Tourism Industry
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