In addition to the article below, note the following comment from José Pontes in his latest China EV sales report (which he publishes monthly). In this commentary, aside from references to year-to-date EV sales status, José discusses Tesla’s declining Model 3 sales in China.
“Tesla’s midsize sedan should bounce back in September, likely to #8, but considering the Model 3 was #2 12 months ago, with around 90,000 registrations, we see deliveries down a significant 26% year over year .One should be concerned about the future of the American model in China, especially given that this decline occurred in the context of a market with triple digit growth rates and that more Model 3-********p (namely BYD Seal and NIO ET5) are about to land on the market. Price cut, anyone?…”
However, note that it refers to the Model 3, which went from 92,755 sales in China in the first 8 months of 2021 to 69,025 sales in the first 8 months of 2022, but Model Y sales went from 59,900 sales to 172,711 sales in the same period . Clearly, there is a much larger increase in Model Y sales than a decrease in Model 3 sales.
José also noted that Tesla had 10% of Chinese plug-in car sales in the first 8 months of 2021, but 7% of Chinese plug-in car sales in the first 8 months of 2022.
Above and below are just a few of the puzzle pieces regarding the Tesla story in China at the moment, but look at them carefully and see how you think they fit together and what they mean.
Now let’s get to what is happening with Tesla vehicle wait times for new buyers in China.
By Peter McGuthrie, courtesy of EVANNEX
As Tesla continues to prioritize production at its Gigafactory Shanghai, the automaker’s wait times have fallen in China as it begins to catch up with demand again. Most investors know that China is an important market, and the shift to reduced wait times for electric cars may or may not be significant when considering the company’s share price.
Tesla’s wait times in China have dropped significantly in recent weeks, as reported by Barron’s, leaving some investors wondering how the automaker’s stock could be affected. Some of Tesla’s wait times in China were reduced by more than a month, with all models now having an estimated minimum delivery of just one week and a maximum of 10 weeks.
Previously, the shortest waiting time for a Tesla was in China with the entry-level Model Y, which estimated a delivery time of between one and four weeks. Now, all Model Y and Model 3 variants have estimated delivery times as low as one week.
The longest wait times for their models are the Model Y AWD Long Range and Model Y Performance, each with estimated delivery ranging from 1 to 10 weeks — down from as much as 14 weeks earlier this week.
Tesla has dropped delivery estimates in China three separate times since completing its production upgrades. Additionally, 14 weeks is quite an improvement considering that some of Tesla’s models were expected to take 20 weeks last month.
The decline in wait times could indicate several different things for Tesla’s stock, and bulls and bears are likely to argue one way or another. First, many investors look to demand to help predict the market’s future, and declining wait times can point to a general decline in demand.
Still, wait times began to fall within a month of Tesla’s production upgrades at Giga Shanghai, and bulls are likely to argue that the drop represents this production increase and not a drop in demand — especially with Tesla’s impressive August delivery numbers. In addition, Tesla’s Giga Shanghai was less strained with the increase in production at the Gigafactory Berlin-Brandenburg, as this factory can now accommodate European orders.
Whichever way you spin it, delivery expectations for much of the Chinese auto market — including electric car startups and Tesla rivals Li Auto, NIO and XPeng Motors — significantly underperformed. Meanwhile, Tesla almost doubled its total production potential worldwide between the Gigafactory Shanghai and Berlin.
Only time will tell how Tesla’s reduced wait times will affect its inventory, but consumers may also be incentivized to buy EVs with wait times reduced by more than a month. According to statements from Tesla’s second-quarter earnings call, CEO Elon Musk also seems to think the drop in delivery times is crucial, calling the automaker’s long backlog “annoying” for customers.
“It’s annoying. It would be like going to a restaurant and you order a burger and you have to wait 3 hours and like,” Musk said. “You want your burger right away. The same with the car. So we want lead times to be reduced.”
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