Don't doubt Elon Musk.

There's every reason to believe the Silicon Valley billionaire eventually will figure out how to solve the trademark dispute that is reportedly delaying the opening of the world's largest Tesla showroom in Beijing, the linchpin in the company's plan to launch its pricey Model S electric sedan in the world's largest automotive market.

What isn't clear is whether upscale buyers in China are ready for an electric car.

"As has been noted in the past, there are very few public charging stations in China, and electric vehicles tend to be expensive - even with government sales incentives," said David Sedgwick, a US automobile-industry analyst and the former Automotive News editor.

Observers already were scratching their heads over how Musk's 10-year-old company could generate significant China sales, given weak worldwide demand for electrics, when news media in China reported that a Beijing businessman, Zhan Baosheng, had trademarked the "Tesla" name in 2006. That meant that Tesla Motors - named after Serbian electrical engineer Nikola Tesla whose 1882 motor design lives on in the Tesla Roadster - was for the foreseeable future blocked from marketing the car in China under its US name.

One report last week, from InAutonews.com, had Tesla trying to get around the dispute in China by renaming itself "Tuosule" - a Hong Kong-dialect transliteration of the company's English name. Another report, from the New York Daily News, said Tesla would shelve its showroom-launch plan until the trademark issue was resolved. Tesla, which is reportedly trying to buy the trademark from Baosheng, hasn't commented on the talks. According to WantChina.com, a stumbling block in the negotiations has been Baosheng's asking price. Tesla reportedly has offered $326,000. Baosheng wants $30 million. How this all turns out is anyone's guess.

Tesla could follow in Apple Inc's footsteps and pay dearly for the rights to the name. Last year, the maker of the iPhone, iPad and iPod ended up handing over $60 million to Proview Technology, a Shenzhen computer-monitor maker that had trademarked the Apple name, to be able to launch the iPad in China. Proview had wanted all iPads kept off store shelves until the dispute was settled.

The company also could opt for the name-change route.

"Tesla could choose to not put its English name on its vehicle, and instead just use its logo (and perhaps some nondescript Chinese characters) to identify the vehicle," said Tim Dunne, an analyst with US marketing-research company JD Power and Associates.

Although Tesla's name has cachet in China where wealthy buyers equate upscale US brands with success, Dunne said he doubted the company would lose sales by taking on a Chinese nameplate. "Every foreign brand (in China) is known by a transliteration of its name in Chinese", Dunne said. In China, he pointed out, BMWs are known as "Bao-Ma"; Mercedes-Benz as "Ben-Chi". Even Ford and Buick go by Chinese names in China, Dunne said.

The controversy certainly hasn't hurt Tesla's reputation with investors. At Tuesday's close, Tesla's stock, which began trading on the Nasdaq Stock Market in 2010, climbed to $167.01, giving it a market value - or the number of outstanding shares multiplied by stock price - of $20.28 billion. The significance of that achievement becomes clear when you consider that Tesla is relatively small in terms of sales and production volume, but ranks as high as 13th globally, according to data compiled by Bloomberg. (General Motors Co, the largest US automaker by sales, has a market value of $46.63 billion.)

"Justified or not, the expectations for this company are now very high," US auto-industry analyst Alan Baum was quoted by Bloomberg. That's evident in Motor Trend magazine's crowning the Model S as 2013 Car of the Year. Consumer Reports in a May review rated it among the best it's ever tested.

It is worth noting that the plaudits are partly driven by Tesla's plan to aggressively expand its battery-charging network and unveiling of a 90-second battery-swap system. Both moves are aimed at easing buyer "range anxiety" about running out of charge, an oft-cited reason for individual buyers' reluctance to embrace electrics, in spite of the Chinese State Council's call for 500,000 sales of battery-powered and plug-in hybrid vehicles by 2015.

"The real issue for Tesla is not the name it uses in China," Sedgwick said, it's "whether well-to-do Chinese consumers are ready for electric cars."

Contact the writer at michaelbarris@chinadailyusa.com

(China Daily USA 08/28/2013 page2)