Tesla Giga Shanghai has demonstrated its strong position in the local market, posting record deliveries in a month when car sales in China were generally weak.
Tesla China set a new record in November 2022, selling 100,291 Giga Shanghai-produced vehicles that month. Immediately after China Passenger Car Association (CPCA) Reports that Tesla China will slash production in December continued after releasing details of record sales at Giga Shanghai.
Rumored Tesla production cuts seem unlikely, or at least not as severe as reports suggest. First, Tesla China officially called the reports “untrue.” Second, Giga Shanghai just posted record sales last month, so why would Tesla China slash production?
Piper Sandler Shines a Light on Tesla China
Multiple publications argued that increased competition from Chinese EV makers could lead to an estimated production cut for Tesla Giga Shanghai in December. Piper Sandler analyst Alexander Potter said Giga Shanghai will not cut production as competition in China’s EV market increases.
CPCA Details about the Tesla China sale back up Potter’s statement. Tesla China sold 69,098 Model Y and 31,193 Model 3 sedans last month. Precisely from Giga Shanghai to foreign territories he exported 37,798 vehicles. This makes Tesla the country’s largest exporter of new energy vehicles (NEVs) in China.
Chinese automobile market situation
A recent memo from Piper Sandler provided some background on Tesla China’s record-breaking sales last month.of CPCA released data last month, revealing a 9.2% decline in auto retail sales compared to 2021. Retail sales have fallen by 10.5% compared to October 2022. Restrictions related to COVID-19 contributed to the decline in retail sales.
“The closures and controls have therefore impacted both supply and purchases of car dealerships in the auto market. This autumn/winter recorded extraordinary retail sales. The downtrend continues,” it said. CPCA.
Potter noted that China’s auto market dips in October and November, months that typically result in strong retail sales. Analysts at Piper Sandler also noted that October and November together accounted for his 18.7% of total yearly sales.Given the CPCA’s Recent data shows Tesla China’s performance in November is even more impressive.
However, the current situation in China’s car market could pose more challenges for Tesla in the future.
“Normally, December is the strongest month, accounting for 10.9% of annual sales. [in China]and therefore, if the recent downward momentum is not addressed by easing COVID restrictions, extensive production cuts may be necessary. Tweets are easy to understand.
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