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Tesla Motors, Inc. Gets Bullish on Hong Kong

By Daniel Sparks - Jan 26, 2016 at 11:00AM

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In Hong Kong, Tesla's sales are taking off and the company is investing heavily in the market.

Tesla Motors (TSLA 4.67%) CEO Elon Musk made a trip to Hong Kong this week. While he was there, he shared some useful information about the company's progress in both Hong Kong and China.

Model S in Hong Kong. Image source: Tesla Motors.

Here are some of the takeaways from Musk's Hong Kong visit.

Hong Kong will be the world leader in EVs
While in Hong Kong, Musk predicted the market will eventually become the world leader in electric vehicles, eventually having more EVs per capital than in any other city in the world.

"I actually believe Hong Kong will be the leading city in the world for electric cars," Musk said.

Acknowledging the market's small yet fast-growing start, Tesla cited data on the 270% year-over-year growth in EV registrations in Hong Kong in 2015. And Tesla is leading the sudden jump in EV sales. Of the more than 4,000 EVs in the market, most of them are Tesla vehicles.

Tesla is investing heavily in the market
Tesla has been investing aggressively in Hong Kong as the market takes off. Hong Kong now boasts the highest density of Superchargers, with 10 locations and 42 chargers. In addition, the company has about 75 destination chargers in Hong Kong.

Going forward, Tesla has plans to continue investing in the market. Musk said it will soon have a "huge" new service center, expand its Supercharger network "substantially," and even begin delivering its Model X in the market by the second half of 2016.

Looking out even further, Musk said Tesla would look to the Hong Kong market as a place to pioneer feasible infrastructure for a high number of EVs. Specifically, he said Tesla would pioneer convenient high-density charging and ensure the grid can handle a high density of EVs. He said he believed Hong Kong would evolve into an "example" for the rest of the world when it comes to EV infrastructure.

Model S in Hong Kong. Image source: Tesla Motors.

Musk also said he is going to talk with local authorities about upgrading Hong Kong's estimated 800 to 1,000 public charging locations to higher-power chargers while still making them available to other EVs.

The Model 3 will eventually be produced locally in China
Tesla wants to secure a location for a factory in China as soon as the middle of this year. And Musk said during his tour in Hong Kong that he hopes the company could bring a factory in China on line about three years from now -- or about a year after the Model 3 begins production in the U.S. Local production is a natural step for the company in making its vehicles more affordable in the market, he has explained on Twitter.

Tesla has 15 stores and seven service centers in China and three stores and one service center in Hong Kong.

Tesla is still fairly new to China and Hong Kong. It expanded to China in early summer of 2014 and to Hong Kong in the late summer of 2014. But after a slow start in China, sales of Model S are accelerating in both China and Hong Kong and the company appears to be increasing its investments in these markets.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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