Due to sluggish sales during the Spring Festival holiday and intensified price competition in the Chinese market, deliveries from Tesla's Shanghai factory dropped to the lowest level in over a year.
According to preliminary data released by the China Passenger Car Association on March 4th, Tesla's shipments from its Shanghai factory in February amounted to 60,365 vehicles, a nearly 16% decrease compared to the previous month, and an even larger year-on-year decline of 19%. This marks the lowest level since December 2022.
Similarly to many other markets globally, the growth rate of the electric vehicle market in China is overall slowing down. The CPCA predicts that this year, automakers will deliver 11 million new energy vehicles to dealers, representing a 25% year-on-year increase. While the electric vehicle market is still expanding, the growth rate has slowed compared to 36% in 2023 and 96% in 2022.
According to the latest estimates from the CPCA, sales of new energy vehicles, including pure electric vehicles and plug-in hybrid vehicles, in February dropped by 9% from February 2023 to 450,000 units. The association stated that multiple price reductions by several automakers may restrain consumer purchases, with hopes that car prices may further decrease.
Tesla has introduced a series of incentives to boost sales in China. On March 1st, Tesla announced that customers could enjoy discounts of up to 34,600 yuan on Model 3/Y purchases by March 31st. Additionally, Tesla offers limited-time insurance subsidies, with Model 3 rear-wheel-drive versions priced as low as 237,900 yuan after the subsidy, and Model Y rear-wheel-drive versions priced as low as 250,900 yuan. Furthermore, all in-stock Model 3/Y vehicles are eligible for limited-time specified paint benefits, with savings of up to 10,000 yuan, and rear-wheel-drive versions of Model 3/Y are eligible for limited-time low-interest financing, with interest rates as low as 1.99%, providing potential savings of up to approximately 16,600 yuan on Model Y.
However, Tesla is not the only automaker affected by the price war. Data shows that BYD's car sales in February were 122,311 units, compared to 193,655 units in the same period last year, representing a year-on-year decrease of 37%.
