Tesla Motors Inc (TSLA)’s China Problems Includes Corruption

Tesla Motors Inc (NASDAQ:TSLA) is battling one problem in China that few are talking about: corruption.

That is according to Jim Chanos, Kynikos Associates founder, in comments made in an interview with CNBC.

The problem with Tesla Motors Inc (NASDAQ:TSLA) and other companies which make luxury items and are selling them or want to sell them in China is that the anti-corruption drive in the country is affecting potential buyers, Chanos said.

“The real problem is an awful lot of people who can afford a Tesla right now in China have some bigger problems on their hands – that is, where did they get the money and who is looking over their shoulder. The anti-corruption drive. The high-end market for lots of things in China right now is very soft,” Chanos said.

China has been cracking down on corruption and it is indeed affecting other industries. Case in point, the gambling stocks which have been also affected by this campaign.

Chanos also noted of other problems he has with Tesla Motors Inc (NASDAQ:TSLA). He said that its founder and CEO, Elon Musk, and analysts all point to the company’s potential very far down the road. He said that these people could confidently say the company is going to sell millions in cars by 2020 and beyond but cannot say certainly what their outlook on sales is in the next few quarters.

Tesla Motors Inc (NASDAQ:TSLA), Chanos also said, has a problem selling in China because it is a country that has an average per capita income that is an eight of what the U.S. has.

Nonetheless, he said he is “a potential purchaser” with regards to Tesla. Chanos did not say, however, what he meant by that.

John Thaler’s JAT Capital Management owned 948,778 Tesla Motors Inc (NASDAQ:TSLA) shares by the end of the third quarter of 2014.