Record Tesla Sales in China, Competitors Closing In

According to current indicators, Tesla is expected to achieve another record quarter with its sales in China, while at the same time facing increasing pressure from local competitors such as BYD, which is aggressively taking Tesla’s share in the world’s largest automotive market, reports Reuters.

The American car manufacturer could sell 155,000 cars in China from April to June, an increase of 13 percent compared to the record first quarter, according to estimates by Shi Ji, an analyst at China Merchants Bank International Securities.

Deutsche Bank predicts that Tesla’s sales in China will reach 153,000 units in the second quarter, while globally it could sell a total of 448,000 units.

– Tesla needs to sell in smaller Chinese cities to stimulate further growth, but its direct sales model is too expensive for expanding the sales network into hundreds of such cities – says Yale Zhang, director of the consulting firm Automotive Foresight.

BYD, on the other hand, has a significant advantage in the markets as it uses dealerships rather than direct sales like its American competitor.

China is Tesla’s second-largest market after North America and home to its largest factory. Earlier this year, Tesla lowered prices for its two outdated models to boost sales and to price itself closer to competitors like BYD.

While smaller Chinese electric vehicle manufacturers such as Nio and Xpeng have struggled with declining sales in China in recent months, BYD has bucked the trend and increased its lead by offering cars priced below 300,000 yuan ($41,500).

BYD is also catching up to Tesla in markets outside of China as its exports grow. It has already surpassed Tesla in Singapore in the first five months, while its Atto 3 sold better than Tesla’s Model 3 in Australia in May.

To get back on track and increase sales, Tesla is now planning ‘refreshed’ versions of the Model 3 and Model Y, and the company is also working with Chinese regulators to approve its advanced autonomous driving software for drivers in China.

As mentioned, Tesla’s largest factory is located in China, in Shanghai, and achieves an annual production capacity of over one million units that Tesla sells in new markets in the region, including Thailand and Malaysia.