Breakingviews: Here's what's behind Tesla's sudden surge in China

Robyn Mak
People visit a Tesla showroom in Beijing, China on July 9, 2014.
Wang Zhao | AFP | Getty Images

Tesla's recent China success puts the spotlight on fast-changing green car policies. The $42 billion electric carmaker unexpectedly tripled revenue last year in the People's Republic. The company has given no explanation for the sudden turnaround, but favourable policies in key cities may be a key factor.

Earlier this month, the Palo Alto-based group revealed that its 2016 sales in China topped $1.1 billion, accounting for 15 percent of the total. Tesla doesn't break out units by country, but JL Warren Capital estimates the automaker shipped almost 12,000 cars into the People's Republic last year, nearly five times the previous year.

In 2014, Chief Executive Elon Musk entered China with grand designs. The billionaire expected sales of his slick Model S sedans, which boasted superior battery technology over cheaper local models, would match those in the United States. But tepid sales, executive departures, and a slow ramp-up of retail stores and charging stations upset his aggressive plans for the world's largest car market.

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