Tesla deliveries from the China plant set a record, but are under review

Tesla (TSLA) delivered a record number of vehicles in September from its Shanghai plant, according to wholesale numbers released Tuesday from the China Passenger Car Association. However, the Tesla deliveries did not meet with views.

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Tesla China sales estimate for September was 83,135 vehicles, an increase of 8% compared to the previous month and a record. However, this is well below the 100,000 vehicle deliveries analysts had estimated Tesla would deliver in China during September.

Tesla delivered 51,802 Model Y crossovers and 31,333 Model 3 sedans from the factory in Shanghai. A total of 5,522 vehicles were exported while 77,613 were local retail sales in China.

Tesla’s weekly car sales in China fell at the end of September, falling 54% in the last week of the month compared to the previous figures. The global electric car giant sold 10,651 cars between September 26 and October. 2 against 23,109 vehicles from September 19-Sept. 25.

Tesla set a record in June with 78,906 vehicles delivered in China. It came close to matching that high in August, but fell short. In June, Tesla exported 968 cars from the Shanghai plant with domestic sales in China of 77,938.

Last week, Tesla reported third-quarter global vehicle deliveries that also set a record, while coming in well below views.

Tesla deliveries totaled 343,830 electric vehicles in the third quarter, up 42% from a year earlier and topping Q1’s record of 310,048. It was also 35% higher than Q2’s 254,695. Analysts had expected Tesla deliveries of 350,000-370,000 in the third quarter, with the consensus slightly above 360,000.

Tesla shares fell more than 1% in premarket trading on Tuesday. Shares had closed down 0.05% at 222.96 on Monday. Other automotive giants Ford (F) and General Motors (GM) also fell hard the following Monday morning UBS (UBS) downgraded both. Ford fell 6.8% while GM was down around 4%.

Tesla deliveries: Concerns about demand

Since Tesla’s Shanghai facility recently received a capacity upgrade, there have been indications that Tesla demand may not be strong enough to support the increased production capacity, especially in China.

Reuters has reported that Tesla plans to keep production at the upgraded Shanghai plant at around 93% of capacity until the end of the year. The recent improvements to the facility increased production capacity by almost a third.

The factory in Shanghai was interrupted this summer due to the upgrades, affecting production in July and early August. However, even if the plant is operating at 93% capacity, it should produce significantly more vehicles in Q4 than it did in Q3.

Tesla China wait times for new vehicles fell sharply in September, signaling little or no backlog. Wait times have increased modestly again, as Tesla returns to exporting Shanghai cars at the start of the quarter.

Tesla also began offering a new insurance subsidy in China during September, acting as a de facto price cut. That insurance subsidy will now expire at the end of the year.

There is speculation that Tesla will announce a direct price reduction in China in early October. Another option is for Tesla to export an even larger share of production in Shanghai. There are some reports that this is already happening, and Shanghai switched to exports a few days ago.

Tesla EV Lineup

Tesla produces the luxurious Model S sedan and Model X SUV as well as the Model 3 sedan and Model Y crossover. However, the vast majority of models are Model 3 and Model Y.

Other vehicles, including the Semi and Cybertruck, have been pushed back several times. Musk has said that the Cybertruck is on track for mid-2023 and that the Tesla Semi will begin deliveries by the end of 2022.

Last week, Musk tweeted Tesla started production on Tesla Semi tractor trailer trucks. Deliveries to PepsiCo (PEP) was to begin on 1 December. Musk said the electric semi-trucks will have a range of 500 miles per charge.

Tesla faces EV competition

While Tesla’s stranglehold on the global EV market remains, it has begun to lose ground in China to the Warren Buffett-backed BID (I WILL).

BYD reported booming September sales, topping 200,000 for the first time. The company sold a record 201,259 new energy vehicles in September, after 174,915 in August and 162,530 in July. That was up 183% compared to a year earlier. Of the 200,793 personal vehicles, BYD sold 94,941 pure electric vehicles, or BEVs, and 106,032 plug-in hybrids.

Clash Of The Titans: Tesla Vs. BID

The China-based auto giant is also adding significant electric vehicle and battery capacity, with the company targeting earlier this year to sell at least 1.5 million NEVs by 2022, possibly 2 million. It looks like shipments will easily top 1.8 million, with 1.9 million or more quite likely, according to analyst estimates.

BYD, the world’s largest manufacturer of electric cars and plug-in hybrids and China’s largest seller of pure electrics, also directly takes on the Tesla Model 3.

BYD’s Seal sedan has about the same dimensions and range as a Model 3 – but is $10,000 cheaper. BYD started deliveries at the end of August, with 1,726 for the month, but is expected to increase in the coming months.

Meanwhile, luxury EV startups Nine (NIO) also offers a Model 3 option when it began deliveries of the ET5 on September 30.

In Q3, Nio sold a record 31,607 vehicles, up 29.3% compared to a year earlier and up 26.1% compared to Q2. Nio sold 10,052 electric cars in July, 10,677 in August and 10,878 in September.

Follow Kit Norton on Twitter @KitNorton for more coverage.

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