In August, China’s passenger vehicle sales returned to year-on-year growth as they rose 2.2% YoY to 1.94 million units, as reported by the China Passenger Car Association (CPCA) on Friday. Last week, Tesla Inc (NASDAQ: TSLA) reported that its EV sales rose 9.3% YoY in August, with its market share of the Chinese EV market almost doubling from July as sales were boosted by lowered prices and increased production at its Shanghai plant.
Optimistic Figures On The Chinese EV Front
This is the first monthly year-on-year gain since May with sales also increasing 8.5% quarter over quarter, or more precisely, from July. During the first eight months of 2023, sales rose 1.8% YoY to 13.38 million units.
Tesla’s August Figures
In August, Tesla increased its market share from July’s 7.5% to 13.2%, according to Reuters calculations based on the CPCA data. Tesla sales rose 8.5% quarter-over-quarter, from July. In August alone, Tesla sold 64,694 cars in China while delivering 65,316 of made-in-China Model Y. According to the CPCA, Tesla delivered 84,159 made-in-China EVs in August, which is a 31% rise from July when its Shanghai plant was shut temporarily to perform the necessary upgrades. Year to date, Tesla has built approximately 625,000 EVs in China, up from about 400,000 during 2022’s comparable period.
Also this week, Tesla unveiled a revamped Model 3 made at its Shanghai plant at this year’s auto show in Munich. This model comes with a lower range and a heftier price tag, but Tesla lowered its prices twice last month and announced further reduction last Friday.
Meanwhile, Tesla’s Chinese EV Rivals Are Coming To Europe…
Last Monday, Warren Buffett-backed Chinese EV giant BYD Company Limited (OTC: BYDDY) launched its Seal electric sedan for Europe at the IAA Mobility motor show in Munich. BYD came to the show with a strong EV lineup with as many as six models, clearly showing it will be going for its share of the European market pie. The Tesla rival showed its ambition to become an export juggernaut. BYD already overtook Volkswagen in China as the country’s best-selling brand and during the first eight months of 2023, BYD sold 1.8 million vehicles that include EVs and plug-in hybrids, which translates to an 83% YoY rise.
Its smaller domestic rival Xpeng Inc (NYSE: XPEV) also revealed its European expansion plans during the show in Munich. Xpeng announced its plans to expand into Germany as early as next year. Xpeng is already selling two models in Norway, Sweden, Denmark and the Netherlands. The arrival of Tesla rivals, or more precisely Chinese EV firms, is seen as a big threat and last warning to European automakers who are moving too slowly towards the all-electric era. Although neither BYD nor Xpeng enjoy the brand recognition of legacy European automakers, their aggressive entry can certainly do a lot of harm to even the strongest automakers. Moreover, Xpeng has the back of Volkswagen who has almost a 5% stake in the company. This year’s automotive show in Munich emphasized the strength of Chinese players on the EV battlefield with around 40% of the presenters being from Asia. Volkswagen already lost its China crown and now it will need to fight its Chinese EV rivals under its home turf like the rest of European legacy automakers, but Volkswagen is at least counting on the EV know-how of Xpeng. Tesla is no longer alone in runing the EV show.
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