Deliveries from Tesla’s Shanghai factory slumped in December after a record November as production was temporarily suspended due to equipment upgrades and lacklustre consumer demand.
The Texas-based company shipped just 55,796 China-made vehicles last month, almost half the month prior, according to preliminary data released by China’s Passenger Car Association (PCA) on Thursday. The PCA didn’t provide a breakdown as to how many cars went into the domestic market versus how many were exported.
That brings the total number of EVs made by Tesla in China to 710,865 for 2022, or around 54% of the company’s worldwide sales of 1.31 million. Tesla increased global deliveries by 40% last year, shy of the 50% average annual growth rate it said it expects to achieve over multiple years.
Despite rolling out a slew of purchase incentives in China, including price cuts and insurance subsidies, Tesla voluntarily reduced production at its Shanghai plant for the first time last month and suspended output as of December 25th amid production-line upgrades and slowing demand.
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While workers got back into the regular swing of things earlier this week, the carmaker is going to let employees take at least eight days off during the Lunar New Year holidays to finish the upgrades.
Tesla’s global deliveries missed estimates for a third-straight quarter, prompting JPMorgan Chase analyst Ryan Brinkman to note that the EV maker’s year-on-year growth is “likely to decline each year from here on out.”
In China, the world’s biggest electric car market, Tesla is also facing intensifying competition from local rivals like BYD and Nio.
BYD reported annual sales of new-energy vehicles, which includes pure electric cars as well as hybrids, of 1.86 million units in 2022 versus just 603,783 a year earlier. Of those, more than 910,000 were battery electric cars.
Nio Founder and chief executive William Li said last month that EV makers in China may face a challenging first half as state subsidies are phased out and supply chains and consumer confidence take time to recover from the pandemic.
Some competitors like Xpeng have said they will compensate buyers for the lost subsidies while Tesla has opted to extend its insurance cover in the hope that may spur demand.
Overall retail sales of passenger vehicles in China rose to 2.43 million units in December, up 47 per cent from a month earlier, preliminary PCA data released on Wednesday showed. That meant retail passenger car sales rose 1.8 per cent year-on-year to 20.7 million in 2022.
On Thursday, the PCA estimated total new-energy vehicle deliveries in December would be around 730,000 units, up 45 per cent from December 2021. It now expects total NEV wholesales for 2022 of around 6.49 million units, slight lower than the 6.5 million initially forecast. – Bloomberg
