May 27, 2024


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Tesla Stock: Tesla China Sales Jump On Export-Led Strategy As Overall Chinese EV Sales Triple

Chinese electric car sales tripled in August with Tesla (TSLA) seeing a big bump in export-led sales, the China Passenger Car Association reported Wednesday. Tesla stock rose slightly before the open but reversed by midday. It’s still within buy range.


China new energy vehicle (NEV) wholesale sales totaled 304,000, up 202% vs. a year earlier. NEV sales include all-electric, hybrid and fuel-cell vehicles. EV-only wholesale sales leapt 200% to 249,000.

Tesla’s wholesale sales totaled 44,264 in August, up 34% from July’s 32,968, even as chip shortages continue to weigh on automakers. The U.S.-based EV maker exported 31,379 from its factory in Shanghai. That’s 29% higher vs. July’s 24,347.

Tesla’s August sales in China jumped 32% vs. May, the second month in the last quarter. Sales are up 30% in the first two months of this quarter vs. the first two months of last quarter.

However, local sales dropped 41% in August vs. May, while exports ballooned 172% last month compared with May.

In July, Tesla unveiled a cheaper, lower-range made-in-China Model Y. Its lower price makes the vehicle eligible for government subsidies, which brings the price down to $42,600. That’s about 20% less than the longer-range Model Y.

With much of Tesla’s China deliveries headed to Europe every month, investors should look at quarterly data to get a better picture of its China sales.

Tesla China’s local sales fell about 16% in Q2 vs. Q1, even though a Model Y production ramps up boosted sales. Made-in-China Model 3 sales fell significantly vs. Q1.

The Tesla Berlin plant is under construction. CEO Elon Musk recently hinted that Berlin production might start as soon as October but other indications point to a start in 2022. In any case, the time is nearing when the Tesla Shanghai plant won’t be exporting as many cars to Europe. That will provide a clearer picture of China demand.

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Supply Woes Weigh On Chinese Rivals Too

Some of Tesla’s China-based rivals also saw deliveries slip. Nio (NIO) delivered 5,880 vehicles in August, down from 7,931 cars in July but up 48% year over year. Xpeng (XPEV) delivered 7,214 vehicles in August, down from 8,040 in July but soared 172% over the year-ago period.  

However, Li Auto (LI) deliveries in August jumped 9.8% vs. July to 9,433 units of its Li ONE, the only model it has on the market. Sales of the SUV, which has a small gas engine, skyrocketed 248% year over year.

Warren Buffett-backed BYD (BYDDF) sold 61,409 new energy vehicles in August, more than quadruple the number sold a year ago. BYD’s EV sales leapt 223% to 30,382.

Tesla’s Production Delays

Tesla halted some operations at its Shanghai factory last month for about four days due to a global semiconductor chip shortage, Bloomberg News reported, citing sources. 

Musk has also tweeted often over the last several weeks about supply chain issues hampering production. But neither he nor the company have given any specifics.

On the plus side, severe chip shortages for the auto industry have boosted pricing power for Tesla and others.

At a company meeting last week, Musk confirmed the Cybertruck won’t be available until late 2023. Musk added that volume production won’t kick in until late 2023. The delay also suggests the 4680 batteries the trucks require are far from mass production.

Musk also tweeted on Sept. 1 that the new Roadster Sept. 1 should enter the market in 2023, “assuming 2022 is not mega drama.” Tesla unveiled the second-generation Roadster in 2017.

Tesla Stock

Shares fell 0.9% to 746.20 on the stock market today. Tesla stock gained 2.6% to 752.92 on Tuesday. It’s still in buy range after clearing a 730 buy point last week, according to MarketSmith chart analysis. The chase zone extends to 766.50.

Tesla stock has an RS Rating of 90 out of a possible 99. Its EPS Rating is 72. Its relative strength line is trending upward. Tesla is a Leaderboard and SwingTrader stock.

Meanwhile, Nio stock dropped 5.2%, after the company announced plans to sell up to $2 billion in shares. Li Auto stock lost 2.8% and Xpeng stock fell 4.8% after both rose solidly Tuesday. XPEV was added to SwingTrader on Tuesday.

BYD stock, which is Hong Kong-listed and trades over the counter in the U.S., was down 2%. On Tuesday, shares shot up 7% to 35.25. BYDDF broke a trend line in a handle, offering an early entry. Shares have an official entry of 36.01.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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