Tesla production in China jumped in January, bucking a seasonal trend for the auto industry.
Xiaolu Chu/Getty Images
Price cuts do stimulate demand. Here’s proof:
Tesla
had a big January in China amid a decline for the overall electric-vehicle industry.
The China Passenger Car Association released wholesale delivery figures for the Chinese car industry for the first month of 2023.
Tesla
(ticker: TSLA) shipped 66,051 vehicles from its Shanghai plant, up 18% from the 55,796 shipped in December and up 10% from the 59,845 shipped in January 2022.
Growth came after Tesla cut prices for its vehicles in China on Jan. 6. Tesla followed with other price cuts around the globe about a week later.
Overall, sales of new energy vehicles, or NEV, fell about 45% in January from December. NEV includes both battery-electric and plug-in hybrid vehicles.
It’s a big decline, but January is a seasonally weak month for car sales in China. What’s more, NEV sales were impacted in January by the loss of some purchased incentives that expired at the end of 2022. The Lunar New Year holiday also fell in January this year.
NEV growth is still expected in China this year. Citi analyst Jeff Chung projected NEV sales will rise about 33% year over year.
All the January headwinds make Tesla’s number look all the more impressive. The figure for January is a wholesale number though. Tesla exports some of its vehicles built in Shanghai to Europe. In December, Tesla produced 55,796 vehicles in China, 41,926 were sold domestically and 13,870 were exported. Tesla typically exports more of its production early in a quarter and less late in a quarter.
The domestic/export split data typically get released by the CPCA around the 10th of the month.
Even if Tesla delivered fewer vehicles in China in January compared with December, investors have other signs that Tesla’s price cuts have spurred demand in China. Reuters reported earlier this week that Tesla was ramping up production in Shanghai to 20,000 cars a week. Annualized that’s about 1 million vehicles a year. Tesla made about 710,000 vehicles in China in 2022, up from about 480,000 manufactured in 2021.
Tesla didn’t respond to a request for comment from Barron’s about the Reuters report.
The Chinese data might be helping Tesla some early Friday. Shares rose 1.3%. Futures on the
S&P 500
and
Nasdaq Composite
are down 0.7% and 1.2%, respectively.
Coming into Friday trading, Tesla stock has gained 53% this year.
Write to Al Root at allen.root@dowjones.com
Credit: marketwatch.com