Tesla Looks To Grow China Sales by Tapping Alibaba Online Market

Oct 20, 2014 11:03 AM EDT | Jordan Ecarma

Tesla is branching out in the Chinese market, offering its popular electric Model S sedan with the aid of online marketplace Alibaba.

The Palo Alto, Calif.-based automaker started delivering cars to China in April and is looking to boost sales online instead of waiting on the time it would take to develop a Tesla dealership network, Bloomberg News reported.

Tesla is offering 18 pre-configured models through Alibaba's Tmall.com that are available with a deposit of 50,000 yuan ($8,200), Tesla China spokeswoman Peggy Yang told Bloomberg. Because the cars are pre-configured, buyers won't be able to pick trim and other features.

China is especially appealing to carmakers such as Tesla since it is the world's largest auto market.  

"We know that it's a big, big challenge for all car manufacturers to penetrate into the huge mainland," Klaus Paur, London-based global head of automotive at researcher Ipsos, told Bloomberg by phone. "This plays perfectly into their strategy. Tesla came into the market doing things differently."

In other news for Tesla, an analyst recently predicted that production of the electric carmaker's much-touted Model X car may be pushed back. In a note last week, Adam Jonas of Morgan Stanley told investors that deliveries of Tesla's next model may not start until fall 2015, USA TODAY reported.

While Tesla hasn't yet had an official word on the delay, CEO Elon Musk has hinted that the Model X's innovations are slowing down the car's production schedule. But whenever it hits showrooms, the new luxury crossover should be worth the wait, Jonas said in the investors note.

"While the entry price could be 5 percent to 10 percent above the entry-level (listed manufacturer's price) of today's Model S, we expect the Model X to be loaded with far higher levels of standard equipment, particularly in areas of comfort, safety and drivetrain," Jonas wrote.

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