Tesla sales exploded in China, but investors don’t seem to care

Advertisement


The China Passenger Car Association said Tesla sales in China fell to 8,621 cars in July, down nearly 70% from June. But exports of cars built at the Tesla plant in Shanghai jumped to 24,347 in July, from 5,017 in June. This means that total sales of Teslas made in China fell less than 1% overall.

Critics say the sharp drop in sales to Chinese consumers is another sign of the growing problems the company is facing in the country. Tesla faces increased competition from Chinese electric vehicle makers as well as bad publicity, including a recall of virtually all cars built in Shanghai. The company also faced protests from Telsa owners at this year’s Shanghai auto show due to poor quality cars and various safety concerns reported by Chinese regulators.

Teslas accounted for just 3.9% of battery-electric vehicle sales in July in China, down from 12.6% in June, said analyst Gordon Johnson, who has been one of the harshest critics of the industry. company. He said the drop shows Tesla faces stiffer competition from local electric vehicle startups.

“Overall, it now seems clear that Tesla has exceeded Chinese capacity relative to domestic demand, which will lead to further price declines and pressure on margins,” Johnson said. “Since China is supposed to be Tesla’s ‘growth market’, these numbers should apply to any Tesla bull.”

Corn You’re here (TSLA) investors did not seem fazed by the drop in sales, with stocks falling less than 2% at the start of trading on Tuesday. This contrasts sharply with larger declines in stock prices following similar weak reports from the CPCA in April and May.
Investors last month found that falling numbers in China didn’t stop Tesla from reporting better-than-expected global sales for the entire quarter, said Dan Ives, technical analyst for Wedbush Securities and a bull of You’re here.

“I think investors are becoming less sensitive to Chinese numbers month over month,” he said. “At the end of the day, that’s not the best indicator of Tesla’s success, as we saw in the second quarter.”

But Ives said if Tesla’s sales in China do not improve, the company could face serious problems in the future.

Tesla just had a very good quarter.  Wall Street is not impressed
Advertisement

“At the moment, we believe China will account for 40% of Tesla’s shipments by next year,” he said. “So selling just 8,000 in a month, even though it’s a volatile number, doesn’t give bulls warmth and haze.”

Unlike other automakers, Tesla does not break down sales by market and only reports sales quarterly, not monthly. The CPCA figures are therefore not confirmed. Tesla did not respond to a request for comment on Tuesday.

– Laura He contributed to this report.

You Can Read Also

Entertainment News

Advertisement

malek

Leave a Reply

Your email address will not be published. Required fields are marked *