Tesla Q3's income in China has soared by nearly 80%. The low-cost factory in Shanghai promotes the company's gross profit margin.

According to documents submitted by Tesla to SEC on Monday (25th US Eastern time), Tesla's revenue in the Chinese market reached 3.113 billion US dollars in the third quarter of this year, up 78.5 percent from the same period last year. Tesla's gross profit margin rose sharply in the third quarter, mainly due to lower production costs at the Shanghai factory, according to the document.

According to the documents, Tesla earned US $9.015 billion in revenue in China in the first three quarters of this year, accounting for about 25% of Tesla's global income, making it Tesla's second largest market after the United States. This figure has also exceeded Tesla's annual income of 6.662 billion US dollars in the Chinese market last year.

In the third quarter of this year, the United States remained Tesla's largest market, with revenue of $6.414 billion, compared with $4.23 billion in other markets except China and the United States.

Tesla's third-quarter results show that Tesla's revenue in the quarter reached $13.757 billion, up 58% from a year earlier, while net profit reached $1.618 billion, a year-on-year increase of 389%.

Tesla's gross profit margin increases

As Tesla continues to reduce costs, and the cost decline is greater than the average selling price decline, achieved a substantial increase in operating profit margin.

According to Tesla documents, in the third quarter of this year, Tesla's total gross profit margin rose to 30% from 28% in the same period last year. In the first three quarters, Tesla's total gross profit margin rose to 29% from 26% in the same period last year.

According to the document, the increase in Tesla's automobile gross profit margin was mainly due to the increase in capacity of the Shanghai super factory, which led to a favorable change in the sales and production mix of Model 3 and Model Y. the average unit cost of Model 3 and Model Y decreased significantly due to significant reductions in raw materials, manufacturing costs, inbound freight and tariff costs for localized procurement and automobile production in China.

Tesla said that the increase in Tesla's sales in Asia and the expansion of the export of cars made by the Shanghai super factory rather than those made by the Fremont plant to other parts of the world have brought higher gross margins for Model 3 and Model Y.

Tesla said in the financial report that with the increase in delivery volume, continuous efforts are needed to prevent delivery capacity from becoming the bottleneck of total delivery. Tesla specially stressed that increasing the export of cars produced by the Shanghai super factory has effectively relieved the pressure on delivery outside the United States, and hopes to set up more factories closer to the local market in the future.