Tesla delivered a record number of vehicles in September from its Shanghai plant, according to wholesale numbers released Tuesday from the China Passenger Car Association released. However, Tesla deliveries did not meet views.
Tesla China sales estimates for September totaled 83,135 vehicles, an increase of 8% compared to the prior month and a record. However, this is well below the 100,000 vehicle deliveries analysts had projected Tesla would deliver in China during September.
Tesla delivered 51,802 Model Y crossovers and 31,333 Model 3 sedans from its Shanghai plant. In total, 5,522 vehicles were exported while 77,613 were local retail sales in China.
Tesla weekly vehicle sales in China fell off at the end of September, dropping 54% in the last week of the month compared to the prior numbers. The global EV giant sold 10,651 vehicles between Sept. 26-Oct. 2 vs. 23,109 vehicles from Sept. 19-Sept. 25.
Tesla set a record in June of 78,906 vehicles delivered in China. It came close to matching that high in August, but fell short. In June, Tesla exported 968 vehicles from its Shanghai facility with domestic China sales of 77,938.
Last week, Tesla reported third-quarter global vehicle deliveries that also set a record, while coming in well below views.
Tesla deliveries totaled 343,830 EVs in the third quarter, up 42% vs. a year earlier and topping Q1's record 310,048. It was also 35% higher than Q2's 254,695. Analysts had expected Tesla deliveries of 350,000-370,000 on Q3, with the consensus slightly above 360,000.
Tesla stock dropped 2.9% to 216.50 during Tuesday's market trading. Shares had closed down 0.05% to 222.96 on Monday. Fellow auto giants Ford and General Motors fell hard Monday after UBS downgraded both. Ford dropped 6.8% while GM edged down around 4%.
On Tuesday, Ford rallied, gaining 1.7% while GM jumped 1.13% before dropping down 0.7%.
Tesla Deliveries: Demand Concerns
With Tesla's Shanghai plant recently receiving a capacity upgrade, there have been indications that Tesla demand may not be not strong enough to support the increased production capability, especially in China.
Reuters has reported that Tesla plans to keep production at the upgraded Shanghai plant at around 93% of capacity through the end of year. The recent improvements to the plant increased production capacity by almost a third.
The Shanghai plant was interrupted this summer for its upgrades, affecting output in July and early August. However, even if the plant is operating at 93% capacity, it should produce significantly more vehicles in Q4 than it did in Q3.
Tesla China wait times for new vehicles came down sharply in September, signaling little or no backlog. Wait times have increased modestly again, as Tesla shifts back to exporting Shanghai vehicles at the start of the quarter.
Tesla also began offering a new insurance subsidy in China during September, serving as a de facto price cut. That insurance subsidy will now run through year-end.
There is speculation that Tesla will announce an outright China price reduction in early October. Another option is for Tesla to export an even-greater share of its Shanghai output. There are some reports that this is already happening, with Shanghai shifting to export a few days earlier.
Tesla EV Lineup
Tesla produces the luxury Model S sedan and Model X SUV as well as the Model 3 sedan and Model Y crossover. However, the vast majority are the Model 3 and Model Y models.
Other vehicles, including the Semi and Cybertruck have been pushed back multiple times. Musk has said the Cybertruck is on track for mid-2023 and that the Tesla Semi will begin deliveries by the end of 2022.
Last week, Musk tweeted Tesla was starting production on the Tesla Semi tractor trailer trucks. Deliveries to PepsiCo were set to begin on Dec. 1. Musk said the electric semi trucks will have a 500-mile range per charge.
Tesla Faces EV Competition
While Tesla's stranglehold on the global EV market remains, it has begun to lose ground in China to Warren Buffett-backed BYD.
BYD reported booming September sales, topping 200,000 for the first time. The company sold a record 201,259 new energy vehicles in September, after 174,915 in August and 162,530 in July. That was up 183% vs. a year earlier. Of the 200,793 personal vehicles, BYD sold 94,941 pure electric vehicles, or BEVs, and 106,032 plug-in hybrids.
Clash Of The Titans: Tesla Vs. BYD
The China-based auto giant is also is adding significant EV and battery capacity with the company targeting earlier this year to sell at least 1.5 million NEVs in 2022, possibly 2 million. Deliveries seem likely to easily top 1.8 million, with 1.9 million or more quite likely, according to analyst estimates.
BYD, the world's largest maker of EV and plug-in hybrids and China's largest seller of pure electrics, is also taking on the Tesla Model 3 directly.
BYD's Seal sedan has roughly equal dimensions and range to a Model 3 — but is $10,000 cheaper. BYD kicked off deliveries in late August, with 1,726 for the month, but are expected to surge in the coming months.
Meanwhile, luxury EV startup Nio is also offering a Model 3 alternative when it began deliveries of the ET5 on Sept. 30.
In Q3, Nio sold a record 31,607 vehicles, up 29.3% vs. a year earlier and up 26.1% vs. Q2. Nio sold 10,052 EVs in July, 10,677 in August and 10,878 in September.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
