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E-mail China Daily, October 2, 2024
China is becoming a crucial market for Tesla, with the electric-vehicle maker offering incentives to boost sales in the country and its Shanghai factory recently exporting its 1 millionth vehicle.
According to Wall Street estimates, Tesla, based in Austin, Texas, is expected to report an 8 percent increase in third-quarter deliveries of its electric vehicles in China on Wednesday powered by extended incentives and financing plans.
"China, which accounts for one-third of Tesla's sales, is a major growth driver," said Scott Acheychek, chief operating officer of REX Financial, which offers exchange-traded funds that track Tesla's stock performance.
Deutsche Bank analysts estimated that in the third quarter, Tesla would deliver about 139,000 Model 3 sedans, 296,400 Model Y SUVs, a combined 13,350 of its larger Model S sedans and Model X SUVs and about 13,500 Cybertruck pickups in China.
The Model 3 and Model Y are manufactured at Tesla's Gigafactory in Shanghai.
With demand for EVs in the United States and Europe dwindling, Tesla delivered about 831,000 vehicles in the first half of this year. To prevent a decline in deliveries, it needs to hit about 979,000 vehicles in the second half.
Shares of Tesla closed at $261.63, up $1.17, in Nasdaq Stock Market trading on Monday.
Sales in China were also fueled by government policies to encourage consumers to switch their gas-powered vehicles to battery-powered ones.
Responding to rising competition from domestic Chinese automakers such as BYD, Tesla introduced a range of offers in the spring, including insurance deals, discounts on certain paint choices and zero-interest loans of up to five years.
The incentives helped the company boost sales in July and August after two straight quarters of declining deliveries, according to data from the China Passenger Car Association.
Analysts said the trend continued through the quarter; 12 analysts, polled by LSEG, expect the company to deliver 469,828 vehicles, which would be its best third quarter, up from about 435,000 vehicles a year earlier.
Ken Mahoney, CEO of Mahoney Asset Management, which invests in Tesla, said the boost from China, along with benefits from a recent interest rate cut by the US Federal Reserve, could help the automaker match its record 1.8 million vehicles delivered in 2023.
Earlier this year, Tesla CEO Elon Musk said the company was on track for higher deliveries in 2024.
Tesla started deliveries of the Cybertruck late last year, and the EV maker expects to increase production to 250,000 units next year.
That will be crucial to address investor concerns around EV demand as they focus on Tesla's unveiling of a robotaxi on Oct 10 — a shift in strategy since the company dropped its affordable car project and one that some say may unlock trillions of dollars in value for Tesla, Reuters reported.
Tesla also is seeing strong output from its Gigafactory in Shanghai, where it exported its 1 millionth vehicle, Tesla Asia said on X on Saturday.
"Thanks to all Tesla owners and supporters!" the post said.
Tesla Vice-President Tao Lin posted on Sina Weibo about the 1-millionth car being exported from Shanghai's Nangang Port.
In its second-quarter earnings report in July, the company said, "While the automotive market in China remains among the most competitive globally, we feel that our cost structure and focus on core functionality that drives value for customers — including autonomyposition us well for the long-term."
Musk said earlier last month that the Shanghai plant, established in 2019, is running at "max capacity."
Tesla is also building a Mega Factory in the Shanghai Lin-gang Special Area. The facility is nearly 60 percent completed, according to techopedia.com, which cited a local news report.
