The Chinese market initially looked more promising for Tesla. Wealthy consumers have a growing appetite for luxury automobiles. And electric cars are seen as a possible antidote to air pollution in China's cities.
In November Tesla said its store in Shenzhen, across the border from Hong Kong, was one of the company's highest grossing locations worldwide.
Two months later, Musk told an audience at the Detroit auto show that fourth-quarter China sales were "unexpectedly weak" due to incorrect perceptions about ease of charging. He blamed the ineptitude of the Chinese sales force.
During an earnings call with analysts the following month, he went even further: "This sounds kind of brain-dead, but our sales team was telling people that it was difficult to charge in China, even though this is not true."
On Friday, Musk said that China sales have grown steadily in the last three months. But researcher JL Warren Capital says 260 Model S sedans were registered in China last month, down from 469 in January.
Like many Western companies, Tesla misread aspects of the Chinese market. The company failed to realize that many wealthy denizens of Beijing, Shanghai and Shenzhen prefer to be chauffeured around.
People who spend a lot of time in the back seat expect creature comforts, not the bench-like configuration found in a standard Model S. Based on customer feedback, Tesla introduced "executive rear seats" as a $2,000 option.
Leather-wrapped, they include two zone heaters; passengers also can use a smartphone to control media, climate and panoramic roof settings.
"We know Chinese customers like to be driven so they want something a little plusher," said Dan Hsu, who runs Tesla's China training program and manages a Shanghai store and one other. "That's one of the benefits of our direct-sales method. We can react much faster to these types of requests."
Hsu said reaction to the new seats has been "good" Chen Zhong, co-founder and chief marketing officer of mobile media firm 21WeMedia, got a Model S in July.
The Beijing resident said Tesla could do an even better job localizing the car to suit Chinese tastes. Chen said popular apps such as QQ music and Xiami aren't loaded into the car's operating system and that the navigation map is unpopular and not the widely used ones from companies like Baidu or Gaode.
"There are some features that we don't have in China yet, but they're coming," Hsu said. "That's one of the great things about our platform, is that it's all available via software upgrades. We want to innovate as fast as possible."
As a foreign automaker, Tesla can't take advantage of subsidies the government pays buyers of domestically made alternative energy vehicles. However, Tesla has been lobbying cities to add its cars to programs that allow customers who buy electric and plug-in hybrid to side-step cumbersome lotteries and auctions required to register a vehicle.
Drivers in Shanghai, Hangzhou, Guangzhou and Shenzhen can now buy a Tesla and register it easily -- a potential spur to sales.
"Tesla is making inroads in terms of meeting the right people and telling their story," said Andrew Fung, an analyst with CLSA. "It feels like Tesla is taking the right strategic approaches now."
In the short term, Tesla's biggest challenge is persuading potential customers they needn't fear running out of electricity between charges -- an understandable concern in a nation where traffic jams can last hours in big cites.
Hsu, who ran a Tesla store in Los Angeles before moving to China about a year ago, tells his staff that the best way to reassure potential buyers about range is sharing customers' stories and experiences.
For instance, new owners often try to find places to charge up when they're out driving, but after a while find home charging is sufficient, he said. Chinese buyers get the home wall-charging unit for free and starting this year Tesla is paying for the installation, too.
In another effort to ease range anxiety, Tesla is handing out mobile connectors that allow drivers to use any outlet.
"It's a really slow charge, but it's just an ease of mind kind of thing to keep with them," Hsu said. "If they need to, they can find a plug anywhere and plug in and get a charge."