Tesla China Rumors Debunked

Mobile Phone, Model 2, and Lack of Demand

These rumors are being debunked by Tesla China VP, Tao Lin:

* Tesla making mobile phones in China or anywhere else.
* Tesla will be making a Model 2 or compact vehicle.
* Tesla cut costs due to lack of demand.
* Tesla is building a second factory in China.
* Tesla promoted China VP, Zhu Xiaotong to second in command.

Tesla not making any mobile phones is the easiest of these to believe. Not making a Model 2 seems surprising as Tesla has talked about their generation 3 vehicle coming at investor day at Giga Texas. If this rumor is true, then Tesla isn't making a Model 2, but instead, just a Robotaxi vehicle. That would mean Tesla is really bullish and confident in FSD and doesn't see a need for a compact Model 2 vehicle.

In the past, Tesla China has denied rumors that ended up being true. Elon Musk also liked a tweet recently that said Zhu Xiaotong was now in the second most important position. That is, however, just a like on a tweet.

Tao Lin also said that Tesla lowering prices reflects their estimated future costs. There is a big difference between 2022 and 2023 now that the pandemic has passed. The supply chain is returning to normal.

There will be no unpredictable shortage of supply chain materials as there was in previous years, which brought uncertainty in cost. With lower cost materials comes a lower price for the cars, reflecting the current market conditions.

You may also be interested in:

• How regenerative braking works in EVs.
• Elon Musk will only make a phone as a last resort.
• The staggering economics of the Tesla semi.

Second Factory and Second in Command

Tesla is also not building a secondary factory in addition to Giga Shanghai at this time. Nor is Tao Lin being promoted to second in command of Tesla.

The lack of a Model 2 and a second factory being built in Shanghai is probably going to cause an uproor with many investors in Tesla. Many see Tesla not being able to sustain their business without a smaller compact model and a second Giga Shanghai to make this compact model.

If these rumors are all debunked, then it means Tesla is simply focusing on their current vehicles and that the Model 3 price point in China is almost at $30,000 anyway and they are treating that like their compact vehicle.

The question is, how much lower can Tesla take their prices with the supply chain reduction in costs. Will the Model 3 one day go below $30,000? That would be interesting...

I have included a Tweet from Sawyer Merritt below. The original Tweet for this was deleted, but some of the information in the below Tweet thread applies:

In Related News: Elon Musk Tells Employees Not To Worry About Stock

BREAKING: @Tesla China VP, Tao Lin, says that Tesla lowering prices recently reflects their estimated future costs."The biggest difference between 2023 & last year is that the epidemic has basically passed. We believe that the supply chain has returned to a large extent..1/10 pic.twitter.com/TAHKUByJLu— Sawyer Merritt (@SawyerMerritt) January 10, 2023

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot