Elon Musk-led Tesla is poised for a record sales figure in China despite pressure from domestic rivals. According to analysts, the American automaker is on track to have another record quarter for sales in China despite growing pressure from companies like BYD, who are cutting into its market share in the world’s largest car market.
According to projections made by Shi Ji, an analyst with China Merchants Bank International Securities, the American manufacturer might sell 155,000 vehicles in China from April to June 2023, a 13% increase over its first-quarter record.
Although BYD and Aion, the EV division of Guangzhou Automobile Group, gained market share, Tesla’s market share in China’s battery electric vehicle market will decline in the quarter to 13.7% from 16% in the first three months of 2023, Shi added.
According to Deutsche Bank, Tesla might sell 448,000 units worldwide and 153,000 in China during the second quarter of the 2023-24 FY.
According to Yale Zhang, executive director of Shanghai-based consultancy Automotive Foresight, “Tesla must sell into China’s lower-tier cities to pursue future expansion, but its direct sales approach would be too costly to expand its sales network into hundreds of such towns.”
In contrast, he continued that BYD has a significant edge in those markets where there are dealerships.
Over the weekend, Tesla will reveal its global sales figures. Association statistics will be accessible in the first week of July for China sales.
After the United States, China is Tesla’s second-largest market and houses its most significant manufacturing. To increase sales, it cut the price of its two outdated models at the beginning of 2023. This sparked a price war, with rivals like BYD following suit by cutting pricing or introducing new, more affordable versions.
BYD defied the trend and increased its lead with its supply of cars priced under 300,000 yuan (USD 41,500), while smaller EV manufacturers like Nio and Xpeng struggled as China sales fell in recent months.
As its exports increase, BYD is also catching up to Tesla in areas outside of China. In the first five months, it outsold Tesla in Singapore, and in May 2023, its Atto 3 outsold Tesla’s Model 3 in Australia.
To boost sales, Tesla is preparing updated models of the Model 3 and Model Y. The corporation is also collaborating with Chinese officials to approve its cutting-edge autonomous driving software.
Tesla is expanding sales of its China-made vehicles into additional regional markets, including Thailand and Malaysia, as its Shanghai facility expands its yearly manufacturing capacity to over 1 million units.