Tesla deliveries from Chinese factory set record but below views

You’re here (TSLA) delivered a record number of vehicles in September from its Shanghai plant, according to wholesale figures released Tuesday by the China Passenger Car Association. However, Tesla’s deliveries fell short of expectations.




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Tesla China sales estimates for September totaled 83,135 vehicles, an increase of 8% from the previous month and a record high. However, that’s well below the 100,000 vehicle deliveries that analysts had predicted Tesla would deliver in China in September.

Tesla has delivered 51,802 Model Y crossovers and 31,333 Model 3 sedans from its Shanghai factory. A total of 5,522 vehicles were exported while 77,613 were local retail sales in China.

Weekly sales of Tesla vehicles in China fell in late September, falling 54% in the last week of the month from previous figures. The global electric vehicle giant sold 10,651 vehicles between September 26 and October 26. 2 against 23,109 vehicles from Sept. 19 to Sept. 19, 25.

Tesla set a June record of 78,906 vehicles delivered in China. It came close to matching that high in August, but fell short. In June, Tesla exported 968 vehicles from its Shanghai factory with domestic sales in China of 77,938.

Last week, You’re here announced third-quarter global vehicle deliveries that also set a record, while well below views.

Tesla’s deliveries totaled 343,830 electric vehicles in the third quarter, up 42% from a year earlier and topping the first quarter record of 310,048. It was also 35% higher than Q2’s 254,695. Analysts had expected Tesla deliveries of 350,000 to 370,000 in the third quarter, with consensus slightly above 360,000.

Tesla stock was down slightly more than 1% ahead of market trading on Tuesday. The shares had closed down 0.05% at 222.96 on Monday. Automotive Giant Friends Ford (F) and General Engines (GM) also fell hard on Monday morning after UBS (UBS) downgraded both. Ford fell 6.8% while GM edged down around 4%.

Tesla Deliveries: Demand Issues

With Tesla’s Shanghai factory having recently received a capacity upgrade, there have been indications that Tesla’s demand may not be strong enough to sustain the increased production capacity, particularly in China.

Reuters reported that Tesla plans to keep production at the upgraded Shanghai plant at around 93% capacity until the end of the year. Recent improvements to the plant have increased production capacity by almost a third.

The Shanghai plant was halted this summer for upgrades, affecting production in July and early August. However, even though the plant is operating at 93% capacity, it is expected to produce significantly more vehicles in the fourth quarter than in the third.

Tesla China’s wait times for new vehicles fell sharply in September, reporting little to no backlogs. Wait times rose slightly again as Tesla returned to exporting vehicles from Shanghai at the start of the quarter.

Tesla also began offering a new insurance subsidy in China in September, serving as a de facto price reduction. This insurance subsidy will now continue until the end of the year.

There is speculation that Tesla will announce an outright price cut in China in early October. Another option is for Tesla to export an even larger share of its production to Shanghai. Reports say this is already happening, with Shanghai switching to export a few days earlier.

Range of Tesla electric vehicles

Tesla produces the Model S luxury sedan and the Model X SUV as well as the Model 3 sedan and the Model Y crossover. However, the vast majority are the Model 3 and Model Y models.

Other vehicles, including the Semi and the Cybertruck, were repeatedly pushed back. Musk said the Cybertruck is on track for mid-2023 and the Tesla Semi will begin deliveries by the end of 2022.

Last week, Musk tweeted You’re here began production of Tesla Semi semi-trailer trucks. Deliveries to PepsiCo (PEP) were to begin on December 1. Musk said the electric tractor-trailers will have a range of 500 miles per charge.

Tesla faces competition from electric vehicles

While Tesla’s stranglehold on the global electric vehicle market remains, it has begun to lose ground in China to Warren Buffett, BYD (BYDDF).

BYD reported booming sales in September, topping 200,000 for the first time. The company sold a record 201,259 new-energy vehicles in September, after 174,915 in August and 162,530 in July. That was up 183% from a year earlier. Of the 200,793 personal vehicles, BYD sold 94,941 pure electric vehicles, or BEVs, and 106,032 plug-in hybrids.


Clash of the Titans: Tesla Vs. BYD


The China-based auto giant is also adding significant electric vehicle and battery capacity, with the company aiming earlier this year to sell at least 1.5 million NEVs in 2022, possibly 2 million. Deliveries look likely to easily top 1.8 million, with 1.9 million or more most likely, according to analyst estimates.

BYD, the world’s largest maker of electric vehicles and plug-in hybrids and China’s largest seller of pure electricity, is also directly attacking the Tesla Model 3.

BYD’s Seal sedan has dimensions and range roughly equal to a Model 3, but costs $10,000 less. BYD kicked off shipments in late August, with 1,726 for the month, but is expected to increase in coming months.

Meanwhile, the luxury electric vehicle startup Nio (NIO) is also offering an alternative to the Model 3 when it began deliveries of the ET5 on September 30.

In the third quarter, Nio sold a record 31,607 vehicles, up 29.3% from a year earlier and 26.1% from the second quarter. Nio sold 10,052 electric vehicles in July, 10,677 in August and 10,878 in September.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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