A visitor poses for a smartphone photo while sitting in the driver's seat of a Tesla model S... [+] electric car on display at the Beijing International Automotive Exhibition in Beijing, Monday, April 25, 2016. (AP Photo/Mark Schiefelbein) Tesla is considering setting up shop in China as the electronic vehicle market there is becoming impossible to ignore. The company's co-founder Jeffrey Brian Straubel, better known as JB, told China Daily newspaper in Germany on Thursday that once he sees a greater uptick in sales for the new and more moderately priced Tesla X sedan in China, then an assembly line starts to make sense. Building the Tesla 3 locally, however, would likely come with a price as China is hell-bent on maintaining its status as the world's leading electronic vehicle produce and market. And China usually require foreign firms to partner with someone locally, often in tech transfer deals that could come back to haunt Straubel. Speculation that China would get a Tesla factory began last month when Jon McNeill, Tesla's president of global sales, said that the EV maker's No. 2 market was a potential candidate for an assembly line. The Tesla 3 launched on April 1. It has received more pre-orders from China than from any other country outside of the United States, according to Ren Yuxiang, Tesla's head for Asia Pacific, who didn't disclose the numbers. Tesla is the A-list star of the EV world, despite other luxury and mid-market car makers also getting in on the action over the last two years. Billionaire Elon Musk's star power has helped the luxury electric car company stay in the limelight more than the BMW i3 and the Nissan Leaf. But perhaps the real star of the EV market is Warren Buffet's Berkshire Hathaway and its 10% stake in the $16.3 billion BYD Auto company. BYD is the world's leading EV brand by sales. In 2015, BYD brought in three times more revenue from EVs than Tesla, which has been focused on the passenger vehicle market while BYD has been focused on large priced public transportation vehicles. They brought in 80 billion yuan ($12.3 billion) last year, up 37% from 2014. By comparison, Tesla's sales in 2014 were $3.1 billion. China's EV sales came in at around 330,000 units in 2015. Production figures in China for EVs are up 300% from 2014, according to the China Association of Automobile Manufacturers. If Tesla can sell as a luxury American brand, which is something many Chinese buyers are willing to dish out for, then it could see China become its biggest market for the new 3 model.
As previously reported, sales of electric vehicles are steadily growing in China, and as such, interest in Tesla has also increased strongly, particularly since the recent launch of reservations for lower-priced Model 3. Tesla has actually received more reservations for the Model 3 from China than any other country outside of the United States, according to a Tesla statement from last week. Therefore, Tesla co-founder and chief technical officer JB Straubel has announced that as interest in the Model 3 increases, constructing a full production facility in China may make sense. However, to be clear, Straubel added that a Chinese factory will only make sense once the market has reached a “critical mass”.