Tesla China shipments declined due to production cuts

This takes the total number of electric vehicles (EVs) produced by Tesla in China for 2022 to 710,865, or around 54% of the company’s 1.31 million worldwide sales. Tesla raised worldwide deliveries by 40% last year, falling short of the stated target of a 50% annual average growth rate over several years.

Tesla unilaterally decreased production at its Shanghai facility for the first time last month and ceased manufacturing as of December 25 due to production-line modifications and sluggish demand, despite launching a variety of purchases in China, including price reductions and insurance discounts.

While employees returned to their regular routines earlier this week, the automaker will permit them to have at least eight days off over the Lunar New Year holidays to complete the upgrades, according to Bloomberg.

For the third consecutive quarter, Tesla’s global deliveries fell short of expectations, leading JPMorgan Chase & Co. analyst Ryan Brinkman to predict that the EV manufacturer’s year-over-year growth was “likely to drop each year from here on out.”

In China, the world’s largest market for electric vehicles, local competitors like BYD Co. and Nio Inc. are putting more and more pressure on Tesla.

In comparison to merely 603,783 units the year before, BYD reported new-energy vehicle sales of 1.86 million units annually in 2022. This figure includes both pure electric and hybrid vehicles. Over 910,000 of those vehicles were battery-electric vehicles.

As governmental incentives are taken out, and suppliers and consumer sentiment take time to recover from the pandemic, Nio Founder and Chief Executive Officer William Li stated last month that EV makers in China may face a challenging first half.

While Tesla chose to increase its insurance coverage in the hopes that it will increase demand, other rivals, like Xpeng Inc., have stated that they will reimburse customers for the lost subsidies.

According to preliminary PCA statistics issued on Wednesday, total retail sales of passenger automobiles in China increased to 2.43 million units in December, up 47% over the previous month. In 2022, retail sales of passenger cars rose 1.8% year over year to 20.7 million.

The PCA predicted on Thursday that there would be over 730,000 new-energy vehicle deliveries overall in December, an increase of 45% from December 2021. In contrast to the previous estimate of 6.5 million units, it anticipates total NEV wholesales for 2022 of approximately 6.49 million units.