Data from the China Passenger Car Association revealed on Tuesday that U.S. automaker Tesla saw a 4.3% year-on-year decline in sales of its China-made electric vehicles, totaling 78,856 units in November. However, deliveries of its locally produced Model 3 and Model Y vehicles rose by 15.5% compared to the previous month. In contrast, Tesla’s Chinese competitor BYD achieved a new monthly record, with passenger vehicle sales surging 67.2%, driven by strong demand for its Dynasty and Ocean series of EVs and plug-in hybrids.
Despite the slowdown in China, global EV demand remains robust, and manufacturers are ramping up production capacity to meet strong consumer demand. Several EV startups are offering discounts to boost sales. Tesla, for example, has started offering a $1,127 insurance subsidy on base-trim Model 3 and Y models in inventory through year-end while offering low-rate loans. Meanwhile, BYD has stepped up discounts on several of its EVs to help drive home a target of selling 3 million units this year.
The latest numbers show that the Chinese market is still a key growth driver for the global EV industry. In the first 11 months of 2024, sales of new energy vehicles in China jumped to a record high of 2.25 million units, up from just 60,000 units in 2009. However, as domestic EV manufacturers accelerate technological upgrading, competition intensifies, with Chinese carmakers grabbing a share away from overseas brands.
China’s top carmakers are also deploying various measures to boost sales, such as cutting prices and providing long-term interest-free financing. Tesla is also accelerating investment in its Shanghai gigafactory to boost local output and exports of its electric cars. The plant is the world’s largest and the first outside the United States for the California-based EV pioneer, which plans to build its battery and sedan cars there.
Tesla’s China plant is set to produce its Model Y SUV in November, marking the start of mass production. It will also produce a wide range of other electric and hybrid vehicles to serve different markets. The company will deliver its locally made EVs to customers in China and export them to overseas markets from the Shanghai plant, which is expected to reach full capacity this year.
Several other Chinese EV startups saw their sales slip last month. Xpeng, best known for its range-extender vehicles, sold about 48,122 of its Mona M03 models in August, down from 51,870 in July. Geely-backed Zeekr, specializing in affordable electric SUVs, said its deliveries of its first SUV in China rose to 18,015 in August, a slight rise from 19,206 in June.
Both BYD and Tesla are also working around the European Union’s imposing tariffs on EVs. The latter is planning to double its Berlin factory’s output,t and the former is investing in a new facility in Poland that will allow it to ship semi-knocked-down kits for assembly abroad. This will circumvent the EU’s extra duties of up to 45.3% on Chinese EVs, which are applied on top of regular import duties.
