Tesla sales in China are relatively fine despite the added complexity of managing the production switch to the new Mode Y, Tesla’s best-selling model.
Model Y represents most of Tesla’s sales, and it is currently undergoing a design refresh that started with Gigafactory Shanghai, Tesla’s highest-producing factory.
The production shift will inevitably result in lower volumes this quarter, but the market is trying to track Tesla’s deliveries in China closely to see how much lower it will be.
The China Passenger Car Association (CPCA) has now released January sales volume and it reported that Tesla China sold 63,238 electric vehicles in January – including vehicles Tesla built in China and exported to overseas markets.
That’s down 11.5% from the same period last year and 32.5% compared to December.
While sales are down, those numbers are far from awful amid the Model Y changeover happening in China.
However, the impact is expected to be much more significant in February due to the Chinese New Year and Tesla is expected to shut down part of the Model Y production lines from January 22 to February 14.
This is going to result in lower inventory available in February and March.
We recently reported that Tesla has increased discounts on Model 3 vehicles. Model 3 is becoming more important this quarter amid the Model Y changeover.
Electrke’s Take
China is what is keeping Tesla going right now. Sales in Europe are falling off a cliff, and demand is also expected to be down in the US this quarter, but there’s still no data on it.
The new Model Y is having an impact everywhere, but Elon Musk’s meddling in politics and subsequent drop in reputation also has an effect, except in China, where they don’t care about that as much.
Elon could name his next kid “Adolf,” and it would probably not affect Tesla’s sales in China much.
On the other hand, this Model Y changeover at Gigafactory Shanghai will have an impact. If it goes wrong, it will badly affect sales, but if it goes smoothly, the impact should be mitigated.
So far, I think that being down 11.5% over last year is not bad.
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