Tesla launches ‘driving school’ in China to help promote brand name

Tesla has always shown disdain for marketing, with CEO Elon Musk boasting his company does not advertise, instead using the money it would have spent to develop products.

But in China, the world’s biggest electric vehicle market where Tesla is gearing up for a major sales push, that tune has started to change as the automaker promotes racing events, showroom parties with DJs and a line of Chinese Tesla stickers for chat apps.

Case in point: Wang Yubo, a 30-year-old marketing executive and Tesla car owner, was invited by the company to burnish his driving skills at a Shanghai racing track this month.

“I learned how to push my Model 3 to its limits,” said Wang, who writes both enthusiastic and critical blogs about Tesla and occasionally races his car with friends.

Tesla is expanding its focus beyond products to service, says Leo Liu, head of the company’s China driving school, which aims to teach people “to make full use of their cars”.

It held three such events for auto reporters, social media influencers and a handful of owners in August - one in Beijing and two in Shanghai and plans to expand to other big cities such as Guangzhou and Chengdu.

“We are also thinking of having more difficult ones on ice tracks in winter this year,” Liu said, adding that more owners will be invited in the future.

While Tesla hasn’t embarked on conventional TV or billboard advertising, the US firm’s China Chief Tom Zhu has been working on strategies this year to boost the brand’s appeal, frequently seeking ideas and opinions from marketing and sales experts, sources familiar with the discussions said.

The sources were not authorised to speak to the media and declined to be identified. Tesla declined to comment.

Helping raise his profile in China, Musk is currently visiting the country and on Thursday held a discussion with Alibaba’s Jack Ma at an AI industry event, although they avoided controversial issues like the US-China trade war.

Tesla’s new efforts to reach customers in China come as the Silicon Valley automaker is preparing to open a big vehicle assembly factory in Shanghai and confront fierce competition in the luxury electric vehicle market it invented.

The firm’s first overseas factory is due to start production by the end of the year and Tesla has said it should be able to build 3,000 Model 3 vehicles a week in its initial phases.

That would translate to nearly four times the number of imported Model 3 vehicles sold in China per month this year, according to figures from research firm LMC Automotive.

The plant is slated to have annual output capacity of 250,000 vehicles after production of the Model Y is added.

“We have to learn how to manage a larger sales and after-sales system as production is growing to a completely different level,” said one source. “That’s why we are doing these events now.”

The sources added, however, that Tesla is spending far less than what a conventional carmaker in China would be spending on marketing.

In Tesla’s favour, it has been exporting cars to China since 2014 and remains the benchmark that other automakers in China often compare their electric vehicles to when they advertise.

The launch of the Model 3 for the Chinese market in late February has also gone well, sending Tesla’s China revenue jumping 42% to $1.5 billion in the first half - equivalent to 13.5% of total revenue.

But Tesla in China doesn’t have the headstart in all-electric vehicles that it had in the US market when it debuted the Model S in 2012.

Chinese startup Nio sells two premium all-electric SUVs, Jaguar has launched is I-PACE SUV and BMW has its i3 hatchback and i8 sportscar. By the end of the year, Audi will have two all-electric SUVs on the market while Daimler’s Mercedes will have one.

The US firm also doesn’t expect Musk’s cult status to propel sales to the same extent it does elsewhere, the sources said.

Most Chinese do not have easy access to his Twitter feed followed by nearly 28 million, although Tesla translates some of his less controversial tweets on its Weibo account.

In addition to chat app stickers that express various emotions - a market strategy also used by other automakers - Tesla is partnering with Tencent’s QQ Music streaming service in organising parties with DJs at showrooms.

Both marketing tactics are China-only developments, the sources said.

Social media users have noticed much more activity on Tesla’s Weibo account in recent months while company has also held several roundtables with reporters and internet influencers throughout China since July.

According to sources, executives explained pricing strategy and expansion plans for its charging network and said they wanted to improve communication with the public.

By contrast, in the United States Tesla rarely grants media access to its executives beyond earnings calls and product launches.

“Tesla has finally realised the importance of adjusting to China,” said Wang. “Given time, it will become more mature.”

Meanwhile, Elon Musk and Alibaba founder Jack Ma discussed Mars and artificial intelligence but steered clear of the US-China trade war in their first joint appearance on Thursday that some audience members said was disappointing.

Their chat, which was livestreamed, was part of the opening events for the annual World Artificial Intelligence Conference (WAIC) in Shanghai.

When the scheduled conversation by the tycoons was first announced, speculation was rife that they could use the podium to talk about issues such as the US-China trade frictions, which both had previously publicly commented on, a factory Tesla is building in Shanghai, or Ma’s impending retirement from Alibaba.

But the duo avoided all mention of those issues, instead chatting for over half an hour about their vision of how technology, especially artificial intelligence, will shape the future.

“I’m always amazed by your vision of technology, I’m not a tech guy,” Ma said in his first remarks to Musk, before going on to talk about how artificial intelligence was not a threat.

Ma described himself as “optimistic” about AI’s impact on humanity, adding that people who worry too much about it have what he calls “college smartness”. “People like us that are street smart, we’re not scared of that.”

They also went on to talk about space travel, with Ma complimenting Musk on his attempts to journey into Mars via SpaceX while Musk noted China’s advancements in that area, as well as how “inadequate” humans were against computers.

Musk did not make any announcements on his underground tunnelling enterprise, The Boring Company, although he had tweeted earlier this month that he would launch a China unit at the WAIC. He told Reuters after his chat with Ma that it could “hopefully” still happen, without elaborating.

Tech employee Simon Zhang, who was in the audience, told Reuters he left with the impression that Musk, who arrived in Shanghai in the morning, was suffering from jet lag.

Reuters