Electric vehicle manufacturer Tesla Inc (NASDAQ:TSLA) maintained its vehicle deliveries in China this August after industry data sourced by Reuters earlier this week revealed that the company had delivered 11,800 vehicles, falling just 200 short of deliveries made in August. This marks for a roughly 10% share of the East Asian country's electric vehicle market, where total sales stood at 109,000 vehicles according to data released by the China Association of Automobile Manufacturers (CAAM).
Tesla's August China Sales Mark Sequential Growth Alongside Total Market Growth of 36%
Chinese sales of new energy vehicles, an all-encompassing term that comprises of both hybrid and pure electric vehicles, witnessed a boom in August as government subsidies provided consumers with fresh incentives to make the cleaner switch. Total sales in the market, according to CAAM data stood at 80,000 vehicles in June, with August's figures released by the agency marking for a 36% growth at a time when economic activity in the country declined following post-pandemic virus disruption. The 36% growth also marks a 13-month slump in the market which had been marred by consecutive drops as the Chinese government cut subsidies.
Tesla, which delivered roughly 12 thousand Model 3 units in August according to data from the Chinese Passenger Car Association (CPCA) therefore secured a roughly 11% share of the intensely competitive market that consists of both local startups and international manufacturers. The CPCA's data for July revealed last month that 11,200 Chinese Model 3 units were shipped in the country, and owing to the slump in the market, Tesla at the time managed to bag 14% of the total electric vehicle pie.
More importantly, a closer look at these statistics reveals that Tesla might be ignoring the effect that subsidies are having in the Chinese market since the company's total sales remained relatively flat in a month when the total market bloomed due to government incentives.
This fact is highlighted even more once we consider that even though Tesla grew its deliveries last month, the Model 3 was unable to take the top place in sales. This honor went to General Motors, whose Hongguang MINI EV that is manufactured by GM and two Chinese companies, SAIC Motor Corp and SGMW took the top spot. The Hongguang comes with a starting price of 28,000 Yuan while Tesla's Model 3 carries a starting price tag of 291,800 – with this price being the only one in the company's vehicle lineup that can take advantage of China's EV subsidies that come into effect for vehicles priced below 300,000 Yuan.
Yet, even as Model 3 sales growth in China failed to impress in August, Tesla's brand image ensured that it eked past other manufacturers that do take full advantage of the subsidies. NIO Inc, which is widely considered to be one Tesla's strongest competitors in terms of product and service strength, delivered 3,965 vehicles in August, despite offering larger vehicles in the same price bracket as Tesla's Model 3, which is a sedan.
The Model 3's dominance in China is also the result of Tesla's extensive investment in the Shanghai Gigafactory. Its competitors do not have the manufacturing output of Tesla, with NIO currently being unable to produce more than 4,500 vehicles-per-month according to statements made by the company's C.E.O. to Reuters. The company expects to increase this output level to exceed 5,000 vehicles by the end of this month, and its current estimate of deliveries in 2020's third quarter of 11,000 - 11,500 vehicles sits below Tesla's deliveries during the single month of August.
Tesla is scheduled to hold an important 'Battery Day' event later this month where the manufacturer is expected to provide important updates about its future plans for battery technologies, and how it expects to benefit from the $218 million acquisition of energy systems developer Maxell Technologies last year. After having taken a beating on the open market that wiped off one-fifth of its market capitalization during the course of trading in one day, Tesla's shares are up by roughly 6% at market open today.
The post Tesla Captures 11% Of Chinese Market In August Via Manufacturing Strength by Ramish Zafar appeared first on Wccftech.
source https://wccftech.com/tesla-chinese-market-august-strength/