Tesla (TSLA) is making headlines again with the recent announcement of strong China sales figures. The automaker reported a 32% year-over-year increase in wholesale shipments for February, totaling 74,402 vehicles from its China factory. This jump also represents a 13% increase from the previous month.
The China Passenger Car Association (CPCA) reported that new energy vehicle sales, including battery electric and hybrid sales, rose by 30% overall in February. This surge is not surprising given that January is typically a “weak” month for overall sales in the region due to the Chinese New Year.
The news of Tesla’s impressive sales figures in China has caused a stir in the market, with the EV maker’s stock up nearly 4% in early afternoon trading on Friday.
Tesla’s Share of the NEV Market in China Slips to 9%
The importance of China’s EV market cannot be overstated, and Tesla is increasing its global sales in the region. Despite stiff competition, Tesla’s share of the new energy vehicle market in China slipped to 9% from 10%, while BYD’s share rose to 37% from 27%, according to CPCA. However, Tesla’s continued growth in China should not come as a surprise. In fact, the company only gets roughly 31% of its total sales from the US, with the rest coming from China and Europe, according to Chandan Kumar, head of products at ETF provider Indxx.
Recent price cuts in January of the Chinese-made Model 3 and the Model Y, which were cut by 13.5% and 10%, respectively, are clearly giving Tesla a boost in the region, despite competitors like BYD outselling them in February. BYD’s new energy vehicle sales jumped by over 100% to 193,655.
Tesla’s head of global manufacturing, Tom Zhu, addressed concerns about demand in China earlier this week at Tesla’s Investor Day. He noted that as long as the company offers a product with value at an affordable price, there’s no need to worry about demand. The price cuts in China generated huge demand, more than Tesla can produce, according to Zhu. In an effort to increase demand, Tesla also cut prices in Australia, Japan, and South Korea.
Tesla Expected to Continue Growing in China’s EV Market
While the price cuts were welcomed by new Tesla buyers in China, recent buyers who missed out on the discounts protested, demanding refunds or other forms of compensation like free charging. Despite these protests, Tesla remains a strong contender in the Chinese market and is expected to continue growing in the region.
In conclusion, Tesla’s recent surge in China sales is a positive development for the company. With the EV market becoming increasingly important, Tesla’s focus on providing high-quality vehicles at affordable prices is paying off in the Chinese market. As the company continues to expand its reach in China, we can expect to see more impressive sales figures in the future.