Tesla Inc.'s (NASDAQ:TSLA) China-made electric vehicles grew 17% in August from July and 3% compared to a year earlier, data from the China Passenger Car Association (CPCA) has revealed. In July, Tesla recorded a 78% year-on-year increase in deliveries in tier-three cities while sales in second-tier cities such as Hangzhou and Nanjing rose by 47%.
Tesla's China sales have continued to grow despite its local sales force undergoing downsizing as part of the EV giant's global layoffs. Tesla's Chinese rival BYD posted a 35.3% year-on-year jump in passenger vehicle sales in August to a monthly high of 370,854 units.
"We project Tesla's retail sales volume to hit 65,000 units in August aided by strong growth in smaller cities. Should such momentum continue in September, Tesla may post the highest quarterly sales volume in China in 3Q24," said Shi Ji, an analyst with China Merchants Bank International (CMBI).
In April, Tesla introduced a financing plan with a zero-interest loan of up to five years designed to attract buyers who tend to be more cautious with spending on big-ticket items in a weak Chinese economy. Further, several local governments have endorsed Tesla cars, deeming them eligible for official car purchases.
In July, Tesla became an official government car in China for the first time ever. Tesla is the only foreign-owned EV car brand on the purchase catalog published by the government of Jiangsu province in eastern China, highlighting the cozy relationship Elon Musk's company enjoys with the Middle Kingdom.
On the Jiangsu government's purchase catalog, Tesla's Shanghai-made Model Y was listed at 249,900 yuan ($34,377). The development went viral on Chinese social media, with some users questioning if foreign cars should be allowed for government use.
Last year, Tesla manufactured some 947,000 cars in China, most of them used locally. China has become an important market for Tesla, with the company deriving nearly a quarter of its total revenue from China in 2023.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More