Tesla Motors Inc (TSLA) Settles Trademark Issue In China

Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk has an ambition of expanding into China, which is the biggest auto market in the world for now. This dream was on the right path, when the company started facing certain trademark related issues in China. The issue has now been solved by the U.S. based electric car maker ‘completely and amicably,’ and with this one of barrier in the way of expanding into China has been removed.

“Mr. Zhan has agreed to have the Chinese authorities complete the process of canceling the Tesla trademarks that he had registered or applied for, at no cost to Tesla,” Tesla said in an e-mailed statement to Reuters on Wednesday.

Finally resolved

The trademark ‘Tesla’ was registered by a Chinese businessman Zhan Baosheng much before the California-based electric car maker made an entry into China. The company has informed that disputes have come to an end, for the second time. In 2006, the trademarks to the name ‘Tesla’ were registered by China’s southern province of Guangdong based Zhan in both English and Chinese. Many unsuccessful negotiations for selling the label to the U.S. Company were made. Tesla Motors Inc (NASDAQ:TSLA) first informed in January that the issue has been resolved, but the last month Tesla was brought to court by Zhan.

Agreements over several commercial terms have been reached by the two parties. Under this agreement Zhan will transfer certain domain names, including tesla.cn and teslamotors.cn, to Tesla as informed by the electric carmaker, but no financial details have been disclosed as yet.

Tesla hopes big from China

Musk has high expectations from China and believes that the nation has huge potential of becoming the biggest global market for the company by next year. The company’s growth plan in China will become properly executable only when the trademark dispute comes to an end completely. Beijing is a potential market for electric car sellers including Volkswagen and BMW because of the incentives offered in the form of purchase subsidies and tax cuts.

“Tesla looks forward to continuing to grow its business in China and to expanding the impact of electric vehicles in this very important market,” Tesla said in the statement.

Whenever a foreign company does business in China, it has to face a thorny issues, which is well represented by Tesla’s trademark dispute. China has a long history of embroiling foreign businesses in trademark disputes of which Apple Inc. (NASDAQ:AAPL), Koninklijke Philips and Unilever N.V. (ADR) (NYSE:UN) are few to name.