Tesla's Exports Soared Nearly Four Times in July, but Domestic Sales Fell by 70%

SHANGHAI, Aug 11 (SMM) - China’s domestic retail penetration rate of new energy vehicles (NEVs) was 14.8% in July, and that from January to July was 10.9%, significantly higher than the 5.8% in the same period in 2020, According to China Passenger Car Association (CPAC).

NEV exports also reported explosive growth. Tesla China exported 24,347 vehicles in July, an increase of 385% from the previous month, which was much higher than the 4407 vehicles of the SAIC passenger cars.

According to Tesla China, the exports of Model 3 increased 222% on the month to 16,137 units in July, and the first batch of exports of Model Y reached 8,210 units, both of which led to the explosive growth in exports.

"Tesla China exported about 50,000 vehicles in the first half of the year, accounting for nearly 30% of China's total NEV exports. Tesla's annual export volume is expected to reach 100,000 vehicles in 2021." Said Cui Dongshu, secretary general of CPAC.

In its Q2 financial report released in July, Tesla stated that considering the strong local market demand in US and the global average cost optimisation, Tesla has completed the transformation to make the Shanghai Gigafactory as its main automobile export centre.

While Tesla China achieved rapid growth in exports in July, its domestic sales in China declined 69% month-on-month. Data showed that Tesla China delivered only 8,621 vehicles in China in July, lagging behind BYD, SAIC-GM-Wuling, SAIC Passenger Cars and GAC Aian, only slightly higher than Lixiang and Xiaopeng.

Science and Technology Innovation Board Daily reported on August 9 that the annual production capacity of Tesla's Model Y and Model 3 in Shanghai has reached 450,000 units.

However, some industry analysts believe that the sales in July does not reflect the true domestic demand. Due to the limited annual capacity of the Shanghai plant, Tesla must ensure the exports of Model Y to the Europe market, which will reduce the supply to the domestic market.

This change in Tesla's production focus has already appeared in the domestic market. Tesla salesperson once said at the end of July that the current delivery cycle of the domestic Model 3 takes four to six weeks.

According to the analyst, domestic demand for Tesla remained strong, but the exports may continue to exceed domestic sales until the Tesla’s plant in Berlin is put into production.