Tesla (TSLA) is about to deliver a record performance in China

Tesla (TSLA) is on track to deliver record sales performance in China as early data show the automaker is still dominant in the world’s biggest EV market.

China has rapidly become the largest EV market in the world.

With Gigafactory Shanghai, Tesla has established itself as a dominant player in the market – especially on the higher end of the market.

But several homegrown companies have since flooded the market with more EV models, and Tesla’s market shares are expected to go down from 16% to 13%.

Nonetheless, the volumes are higher, and therefore it is enabling Tesla to still deliver record sales in China.

According to Shi Ji, an analyst with China Merchants Bank International Securities (via Reuters), Tesla is on track to deliver 155,000 vehicles in China this quarter.

With just a few days left in the quarter, the estimate is likely very close to reality, as insurance data has been showing strong performance from Tesla in China.

155,000 deliveries would be up 13% from the previous record quarter, which was just last quarter.

Despite the likely new record quarter, Tesla is seen as plateauing in the important Chinese market.

Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight, believes that Tesla needs to expand beyond China’s biggest cities to keep growing, but he believes the cost of building service centers and stores could be stopping that from happening:

“Tesla has to sell into China’s lower tiered cities to seek further growth, but its direct sales model would be too costly to expand its sales network into hundreds of such cities.”

Zhang believes that’s where companies like BYD hold an advantage through their dealership business.