Tesla Revs Up China Expansion As EV Rivals BYD, Geely Race Ahead

What happened According to the Chinese Passenger Car Association, Tesla’s Shanghai Gigafactory delivered 75,842 vehicles in China in April, outpacing Mercedes-Benz, BMW, and Audi. Tesla’s Model Y was the bestseller with 49,059 units sold, followed by the Model 3 with 26,783 units sold. Earlier this month, the Elon Musk-founded electric vehicle (EV) giant raised the prices of several of its models in China. It hiked the prices of its top two models — the Model Y and Model 3 — by 290 (2,000 RMB), and the Model S and Model X’s prices by 2,751 (19,000 RMB). The move follows six rounds of price cuts from January to April this year, which prompted more than 40 local and global car brands to slash their own prices to stay competitive. The Jing Take The number of Tesla vehicles sold in China in April was down 14.7 percent from March, but this was still a huge improvement on April 2022, when the company delivered a meager 1,512 China-made Model 3 and Model Y cars. Nevertheless, Tesla’s Q1 net income fell 24 percent year on year to 2.51 billion due to the underutilization of new factories, higher costs, and lower revenue from environmental credits. Moreover, when compared to EV sellers, Tesla has fallen behind local players. In April alone, BYD delivered 104,364 all-battery electric vehicles (BEV), mostly in mainland China. In terms of total global car deliveries, Tesla sold a record 422,875 vehicles in the first quarter while BYD sold 552,076 units, including BEVs and plug-in hybrid cars (PHEV). In March this year, BYD stopped producing combustion engine vehicles. Tesla has a tough road ahead in China. Besides BYD, China has no shortage of companies and startups that hope to dominate the world’s largest EV market. They include Wuling, Chery, Guangzhou Automobile Group, Nio, Xpeng, and Geely. Moreover, these players have started to encroach into the premium and luxury segment and have announced plans to take these models to global consumers. Last month, two-year-old Zeekr, the premium EV brand that operates under Geely, confirmed plans to expand to Europe where it intends to sell its Zeekr 001, a 44,000 all-electric luxury shooting brake that directly competes with Tesla’s Model Y. Still, Tesla is revving up its investment in China, where the government aims to have 40 percent of vehicles sold domestically be EVs by 2030. The company plans to expand its presence in the country with a new factory in Shanghai focused on producing Megapacks, which are massive batteries the size of a shipping container that are used to stabilize energy grids. With China making up roughly 40 percent of Tesla’s sales, this comes at no surprise. From car designs to production capabilities, the EV maker must continue to accelerate in the mainland if it hopes to outpace competitors. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Tesla Revs Up China Expansion As EV Rivals BYD, Geely Race Ahead