Local Sales Of China-Made Teslas Collapse In July

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by Tyler Durden
Tuesday, Aug 10, 2021 - 08:07 AM

Following months of uncertainty regarding Tesla's relationship with the CCP, things still look to be a little shaky in Asia for the automaker.

This morning it was reported that Tesla sold 32,968 China-made vehicles - this includes vehicles sold in China and vehicles exported - according to the China Passenger Car Association (CPCA), in July. This was below the 33,155 vehicles sold in June; a number that we pointed out could have been a sign that the ship had steadied between Tesla and China - and that demand was once again rising.

But July's numbers seem to indicate little, if any, growth in demand between June and July. 

Shipments of locally made vehicles sold in China plunged, to 8,621 cars from 28,138 in June. There is generally cyclicality for automaker sales wherein the beginning of a quarter (July) comes in markedly lower than the end of the previous quarter (June).

Source: BBG

PCA Secretary General Cui Dongshu said during a briefing Tuesday: “Tesla tends to be aggressive in exports regardless of the domestic market in July. The fact that Tesla’s domestic deliveries didn’t reach 10,000 is normal and fine.”

24,347 of the 32,968 cars made in China were manufactured for export. 

Tesla fell between BYD, who sold 50,387 China-made EVs and GM/SAIC, who sold 27.347 EVs.

While the numbers may appear to be "normal" on the surfact, it is hardly the robust vote of confidence that would have investors sleeping soundly assured that all is well and the China story is no longer going to be a factor.

Bernstein analysts led by Toni Sacconaghi said earlier this month, according to Bloomberg: “We think current demand for Tesla is fine in China, but that Tesla has over/forward built capacity relative to the U.S., which is triggering price cuts and exports. Domestic competition is likely to make it difficult to Tesla to fully capture its fair share or sustain similar levels of profitability.”