Electric car sales in China have been in turmoil recently. Changes in EV incentives at the national level last year caused a steep decline in sales of “new energy vehicles,” then the coronavirus shutdown came along and slammed EV sales even more. The Tesla Model 3, however, has done quite well there and was by far the best selling electric car in the first quarter.
In March, the country started to climb out of its new car sales slump, while the #1 Model 3 delivered more than twice as many electric cars as the #2 BYD Qin Pro EV. Though, as many readers know, Tesla tends to deliver cars in waves, with the last month of the quarter accounting for a large bulk of the quarter’s deliveries.
Sales of electric cars rose nearly 10% in April compared to March, but Tesla was not among the beneficiaries of that increase. According to CNBC, the China Passenger Car Association has reported registrations of the Model 3 in April equaled only 3,635 cars. Compared to the 10,160 Model 3s sold in March, that is a 64% drop. That is the flip side of this wave-like delivery process.
BYD took the top spot in new energy vehicle (NEV) sales in April, according to Investors Business Daily, selling 5,096 new energy vehicles, including its plug-in hybrid Qin sedan. Ford sold 3,999 plug-in hybrid Escape EVs. In the battery electric sales race, NIO was just behind Tesla with 2,907 cars sold.
While media headlines highlighted (in a somewhat misleading manner) the 64% drop for Tesla from March to April, on Wall Street, analysts shrugged at the news. “The first month of any quarter is often a very small faction of the overall quarter’s sales,” Roth Capital analyst Craig Irwin told Barron’s. However, he also added, “China will not be the lay up on huge sales numbers that many anticipate for Tesla.” Take a look at his record analyzing Tesla here.
In January, the first month of the first quarter, Model 3 sales were 3,813, so Tesla’s April numbers still do show a decrease from a more comparable recent month, but only a modest one. In April 2019, the Model 3 had ~3,000 sales. In the final analysis, the drop off between March and April may be a statistical anomaly with little long-term relevance. Recall that we’re still in the middle of a pandemic with dramatic economic consequences. For now, we at CleanTechnica HQ won’t label the 3,635 registrations in April as good or bad — just neutral.
“This was an ugly number for April and will throw some ice on the springboard rebound thesis in China,” Wedbush analyst Dan Ives told Barron’s. “That said, investors will look to a more normalized [10,000 units] for May to gauge a better trajectory of Model 3 demand in China.”
That may be a bit optimistic. These are not normal times and any projections based on past history should be viewed with a degree of skepticism. None of the analysts contacted by Barron’s appear to be overly concerned about April’s numbers. The important statistic is that the Model 3 is still the best selling battery electric car in China.