Tesla Manager Leaves as Musk Prepares for China Expansion

Mar 31, 2014 4:48 pm ET

(Updates with closing share price in final paragraph.)

March 31 (Bloomberg) -- Tesla Motors Inc.’s general manager in China has left the company as the electric-car maker gears up to gain a foothold in the world’s largest auto market.

General Manager Kingston Chang is no longer with the company, Tesla Vice President Veronica Wu said in an e-mail today, declining to provide further comment. Sina.com reported he resigned because of personal reasons. Chang, who joined Tesla from Volkswagen AG’s Bentley about a year ago, didn’t answer calls to his mobile phone or reply to text messages.

The departure comes as billionaire Chief Executive Officer Elon Musk, who’s shaken up the automotive industry with Tesla’s electric cars, sets his sights on expansion in China. Musk said in January that sales in the country should match U.S. levels by as early as next year.

Musk has “quite a bit of notoriety in China, and I suspect Tesla is going have pretty good acceptance there,” said Jim Press, the former Chrysler LLC vice chairman and U.S. sales chief for Toyota Motor Corp., who manages international dealership business for McLarty Automotive Partners.

Tesla, which has yet to start deliveries of the Model S in China, began taking orders in August for the sedan in the country and opened an 800-square-meter (8,600 square feet) store in a Beijing shopping mall three months later to showcase its vehicles.

From Bentley

Chang joined Tesla from Bentley China in March 2013, according to his LinkedIn profile. Prior to Bentley, where he was general manager, the Chinese University of Hong Kong graduate worked for companies including Inchcape Plc and Jebsen Group over a career in the automotive industry spanning more than two decades.

Tesla’s entry in China is closely watched by other automakers that have been trying to convince local consumers to buy electric cars. The country is lagging behind its target to have 5 million alternative-energy-powered vehicles by 2020 amid a lack of charging stations and high costs, even though public concerns over worsening air pollution are mounting.

Tesla has said it wants the Model S to qualify for China’s electric-car subsidies. The model will be priced from 734,000 yuan ($118,000) in China, including shipping costs, value-added taxes and import duties, the company has said. In the U.S., the car starts at about $71,000 before federal tax credits.

The car’s high price won’t limit its appeal in China, Press said. “Only about 1 percent of buyers there can afford it, but that’s a big 1 percent,” he said.

Tesla fell 1.8 percent to $208.45 at the close in New York. The shares have risen 39 percent this year.

--With assistance from Alan Ohnsman in Los Angeles.