 reported that shipments of its vehicles made in China dropped during July.){kind=link}
Tesla Car Sales
Tesla reported that shipments of its vehicles made in China dropped during July. Domestic China shipments of Tesla cars dived by 69% to 8,621 units last month, as reported by Bloomberg. With Europe-bound deliveries rising, overall shipments of Teslas made in China fell by 0.6% to 32,968 in July.
Since its warm reception in China earlier in the year, when Elon Musk spoke highly of the country, it has been a bumpy road for the carmaker. Issues surrounding crashes and protests led Tesla to receive some concerning publicity, which appears to have impacted some of its sales.
Competition
Additionally, Tesla is facing stiff competition within China. Namely, from Nio and Xpeng. Nio, the maker of the ES8 and ES6 electric sport-utility vehicles, delivered a total of 7,931 vehicles in July, an increase of 124.5% compared to the same period a year ago. While Xpeng, which makes the P7 sedan and G3 sport-utility vehicles, delivered 8,040 vehicles, an increase of 228%.
July is the first month on record that domestic companies have recorded similar local delivery numbers to Tesla.
Tesla Share Price
Over the past six months the Tesla share price has dropped by 12.53%. Having been as high as $880 per share at the end of 2020, it now stands at $709.99. However, as the news broke of the fall in deliveries in China, the American company’s share price didn’t react.
While local deliveries at less than 9,000 units came as a surprise, it appears to be following a pattern, which is why investors are not spooked. The figures are a repeat of April, the first month of Q2, when Tesla’s deliveries to the Chinese market were 12,000. Come June, however, the end of Q2, Tesla shipped 28,000 vehicles to the Chinese domestic market. It would seem that Tesla exports more cars at the beginning of the quarter and then focuses on local deliveries towards the end.
Delta Variant
A significant outbreak of coronavirus is causing concerns over the level of economic activity in China. Travel restrictions and mass testing have come back as officials seek a solution to curb the onset of infections.
Recently released data suggests that China’s recovery, which was ahead of other major economies following the pandemic, is now under pressure. Over the second quarter, China’s economy grew by 7.9% year-on-year, and 1.3% compared to the quarter before.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, told the Financial Times that “inflation is rising and growth is slowing”. This is likely to add further pressure to supply chains. With Tesla already dealing with chip shortages, these factors could create difficulties in bringing domestic delivery back to satisfactory levels.
“With global vehicle demand at record levels, component supply will have a strong influence on the rate of our delivery growth for the rest of this year,” Tesla said.