Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is confident that sales of Model S in China would match the levels of United States by next year. He said that demand in China has surged to a level, where Tesla needs to build a local plant in the country.

China a huge market

For Tesla, “it could be as big as the U.S. market, maybe bigger. I don’t want to get overexcited about it”. Musk, however, believes that even if the plant is not set up there, China would become the second biggest market after the United States. He said that if every factor works in favor of the company then China would have as much demand for Model S as in the United States by 2015.

“It’s not my firm prediction – it’s more like a low-fidelity guess.”

Recently, the company announced that the price of Model S will be kept at $121,280 in China. Elon Musk is scheduled to visit China next month to unveil Model S, according to a phone interview to Sfgate.

Tesla competing with Audi and BMW

Tesla Motors Inc (NASDAQ:TSLA) posted a surprising number this month revealing that fourth quarter shipping were 20% more than what the company projected. The performance came in as good news for analysts and investors, who were concerned after a not so good start of Model S assembly process, in 2012. Musk has planned to sell hundreds of thousands of electric autos annually in markets including U.S., China, Europe, Japan and other markets.

Autohome, a car pricing website, revealed that Model S is the new entrant in the high end luxury car segment in China, and the price point of the car takes it to the level of Volkswagen’s Audi S5 sedan and BMW’s 5-series GT sedan. In the United States, price of Audi is kept at $64,117 and the BMW’s 5-series GT is priced at $70,429, according to Edmunds.com.  According to John Lovallo, an equity analyst for Bank of America, “While more costly than the U.S. version, the Model S price in China appears “well below expectations.” He has given underperform rating on the company.