About Tesla

Tesla is an enterprise that provides designs, procedures, and distributes car

industry and components for electric vehicles. Furthermore, they have
developed exterior
 Millionaires had already surpassed that of

Market any other nation by 2018, and by 2021

China is expected to have the most affluent
households in the entire world

Entry In 2016, it was estimated that 7.6 million

The undisputed importance of China for
the global luxury goods market can best be
shown using some statistics. The
constantly increasing number of Chinese
Chinese luxury consumers account for over
RMB 500 billion (USD 7.4 billion) in
annual spending, representing almost a third
of the global luxury market.
Chinese households purchased luxury
goods a number larger than the total
number of households in Malaysia or the
Netherlands. Each of those 7.6 million
households spends on average RMB
71,000 on luxury goods annually—which
is twice what French or Italian households
spend.

PESTLE
Political Factors:
The political condition of any country affects the businesses located within its periphery.
Therefore, to provide the organizations with an ideal environment, China must have a stable
political status. Here are some political factors that can influence China:
Though the country has good trade relations with most of the other powerful nations, its
dispute with the US and countries of South China may ruin the political stability. Hence, it
disturbs the ideal business environment for the investors.
China has proper strategies to maintain the low cost of raw materials. The investors can also
have a low labour cost, making it a good business choice.
The government makes plans to promote businesses and subsidizes companies. For example,
the Chinese government is currently promoting e-commerce businesses.
Economic Factors:
The economic condition of any country is directly related to its growth. As a country, China has
shown impressive economic growth. Thus, making it an ideal location for business investment.
PESTEL analysis China can show how economic factors can have an impact on its development:
In China, the labour cost is significantly low, and hence many reputed companies prefer to hire
employees from China. They can also hire experienced labour from this country at a price
much less than other countries.
China has a high GDP. Thus, the purchasing power of the people of the country is also
significantly higher. Therefore, investors find a good market in China. The inflation rate in
China is alarmingly high, and the cost of property is also increasing. It can slow down the
growth of the economy in the future, which may impact its growth.
Social Factors:
The socio-cultural conditions of any country indirectly affect the business and economy of the
country. China is not an exception. Here is how sociological factors can impact the growth of the
country:
It has a massive population of which almost 90% of them are literate. Therefore, the business
can get expert labourers and employees at a lower cost. The high population is one of the
reasons for low labour costs.
The lifestyle of the people is changing and so are their choices and tastes. As the urban
lifestyle is penetrating most of the land, businesses are also noticing a change in social
behaviour and purchasing trends.
China has approximately 420 million internet users and this number is increasing rapidly.
Due to internet access, the number of people using e-commerce is also on the rise. It has
made the country the best place for budding e-commerce companies.

Technological Factors:
Business and technology are intricately related. Technical innovations affect the capacity of
production, resulting in a surge in business revenue. PESTEL analysis China can point out how
technology can contribute to China’s growth: The country has shown advancement in
technological innovations. It has changed their mode of production as well as the distribution.
The biggest tech giants like Baidu, and Alibaba, operating worldwide, can allow businesses to
increase their sales.
 China is also making strategies to inspire people to concentrate on innovations that can be
helpful for their growth. These policies can be beneficial for domestic as well as international
companies to have better production. As the country has good technological support, a
considerable population prefers to use e-commerce instead of visiting the store to buy products.
Environmental Factors:
Though ecology does not majorly affect the growth of a country, it may have some indirect
impact. China has experienced rapid growth in the last few decades, and as a result, there is
urbanization. Here are some ecological issues which can impact China:
The country has set up some guidelines for the business. It aims to secure the environmental
standards of production. It may increase the cost of production and decrease the profit.
China is also aiming to make electronic vehicles its primary mode of transport. If they can
successfully incorporate it, the car manufacturing company may get a better market for production
and selling.
As the country has factories on a considerable scale, they need to work on their technologies. It
can reduce the pollution level and the cost of manufacturing.

Legal Factors:
Certain legal conditions may have an impact on the business of a company. China has some laws
that can show the effect on its growth as a business-promoting country:
The country has banned social media like Facebook, Whatsapp, Twitter, and YouTube, which has
prevented these platforms from earning revenue.
China also has some restrictions on the investment of foreign companies. It may decrease the
number of international companies investing in the market of the country.
The country is currently formulating laws for the eCommerce business, which is, to some extent,
troublesome. The state has some laws for taxation and IPs, but there is no law to validate the
online contract between the seller and buyer. It may increase the risk of online transactions to
eCommerce sites.

Challenges
Chinese authorities have been rolling out measures to encourage people to buy cars to boost sales
as the government looks to the industry to help revive a slowing economy. Sales of electric cars
are on the rise, boosted by factors such as high fuel prices globally and people taking advantage of
government support packages.

Efforts by the Beijing government are boosting the auto industry's recovery from the March-May
downturn when auto supply chains and manufacturing were largely disrupted by strict lockdowns
that caused Many factories across China to close. As China's electric vehicle market booms,
competition is becoming increasingly fierce.
China's auto giants are ahead of foreign
players like Tesla and Volkswagen AG in
the domestic market. SGMW, a joint
venture between General Motors Co. and
SAIC Motor Corp. said they have sold more
than one million electric and plug-in hybrid
vehicles since 2017. Their flagship small
electric vehicle, the Wuling Hongguang
Mini, is among the electric vehicle products
it sells. best in China.
Shenzhen-based BYD, which discontinued
production of traditional internal
combustion engine cars in March, was a
beneficiary of rising demand for electric
vehicles, thereby becoming an electric
vehicle manufacturer. China's largest based
on sales in 2021.

Specifically, the company BYD invested by billionaire Warren Buffett's Berkshire Hathaway has
emerged as one of the formidable rivals of the US giant Tesla when it recorded a threefold
increase in car sales in July compared to of the US giant Tesla. the same period last year, reached
more than 162,000 units, according to data from the China Passenger Car Association. BYD's data
shows that about half of them are pure electric vehicles and the rest are hybrid vehicles.

The association also said that Tesla's sales in China in July fell 14% year-on-year, to just over
28,000 units. The company run by billionaire Elon Musk said that nearly 20,000 cars made by
Tesla in Shanghai have been exported to markets outside of China. Tesla is going through a rough
year after the wave of the COVID-19 pandemic caused the company's Shanghai plant to halt
operations for a period of time last month.

Some less well-known Chinese startups are also emerging in the electric vehicle market. Some
units even recorded record sales in July. Hozon Auto, Leap Motor and Seres Group Co., which co-
developed electric vehicles with Huawei Technologies Co., each sold more than 10,000 vehicles in
July. BYD, Hozon and Leap all have models available starting at about a third of the price of Tesla
electric vehicles.
Summary
China is catching up in robot shuttles and software-controlled fleets and updates. It needs to
improve in power electronics, high energy density supercapacitors, structural electronics and other
aspects. With EV batteries becoming smaller soon due to top-up charging at speed and other
innovations, some Chinese giga factories may become stranded assets. Chinese EV components
will succeed hugely abroad and damage the business of traditional Western Tier One suppliers
insufficiently investing in R&D.
Pollution, congestion, vehicle specifications and evolving capability in China make electric
vehicles favoured by the government. Regulatory reuse, recycling and traceability in China are
covered by many scientific and automaking institutions as successful opposites with big
challenges and opportunities ahead. These issues constitute issues to be covered in further
research.