Tesla, the leading electric vehicle maker in the world, saw a decline in its sales of China-made vehicles in September, as it prepared to roll out a newer version of the Model 3 sedan. According to the China Passenger Car Association (CPCA), Tesla sold 74,073 vehicles produced at its Giga Shanghai factory last month, down 10.9% from the same period a year ago and 11.98% from August.
Model 3 absence affects domestic sales
The drop in Tesla’s sales was partly due to the absence of the Model 3 sedan in the domestic market, as the company upgraded its production line to produce a restyled version of the mass-market car. The new Model 3, which was unveiled in September, has a starting price of 259,900 yuan ($35,600) and features a redesigned interior and exterior, as well as improved performance and range. Tesla said it would start delivering the new Model 3 in China and other markets in the fourth quarter.
The Model 3 has been one of Tesla’s best-selling vehicles in China, although it has been outsold by the Model Y crossover in recent months. In August, Tesla sold 29,621 Model 3s and 54,538 Model Ys in China. In September, however, only the Model Y was available for domestic customers, while the Model 3 was exported to other countries. Tesla shipped about 30,000 vehicles from China to overseas markets last month.
Tesla still posts strong Q3 results
Despite the decline in September sales, Tesla still posted strong results for the third quarter overall. The company sold 222,517 China-made vehicles in Q3, up 18.16% year-on-year and accounting for 51.15% of its global deliveries. Tesla delivered 435,059 vehicles worldwide in Q3, up 26.53% from a year earlier but down 6.67% from Q2. The company also produced 430,488 vehicles in Q3.
Tesla has sold a total of 699,056 vehicles made in China from January to September this year, a 44.71% increase from the same period last year. The company is aiming to achieve a worldwide delivery milestone of 1.8 million cars this year, which would require an aggressive push in the fourth quarter.
Tesla faces competition and challenges in China
Tesla’s dominance in the Chinese electric vehicle market is being challenged by local rivals such as BYD, Nio, Xpeng and Li Auto, which have been launching new models and expanding their production capacity. BYD, for instance, saw its passenger vehicle deliveries grow 42.8% year-on-year to 286,903 last month, surpassing Tesla by a wide margin.
Tesla is also facing regulatory scrutiny and consumer complaints in China over issues such as quality, safety and data security. The company has been trying to improve its customer service and public relations in the country, as well as investing in research and development and innovation. Tesla is reportedly planning to launch a new low-cost model in China next year that would cost around $25,000.
Tesla is also facing a probe by the European Commission into subsidies for battery-powered cars from China, along with Renault and other Chinese automakers. The investigation could result in tariffs or other measures that would affect Tesla’s exports from China to Europe.
