CNN reported today that Tesla’s sales have “cratered” in China. Other outlets reported the info in a similar way. Yes, Tesla’s domestic sales in China were low compared to last month. This is completely normal for Tesla because of its shipment and delivery process. The first month of the quarter sees lower sales and the last month of the quarter sees higher sales. In total, Tesla reportedly sold 32,968 made-in-China vehicles in July, and 73% of those were exported to Australia and parts of Europe.
CNN suggested that Tesla is losing ground in China due to July sales data, and that the steep sales decline is just one of many signs of Tesla’s problems in China. However, a lot of those “problems” are just caused by manufactured FUD, including some misleading media organizations, some of which even apologized to Tesla. CNN brought up a recent “recall,” which wasn’t actually a recall, and a highly publicized protest by a Tesla owner (while neglecting to mention that the Tesla owner apologized for staging the “brake failure” protest). These are the “problems” Tesla is facing.
So, what do we really know?
In mid-July, Tesla actually sold out of its new, lower-priced Model Y SR RWD until the 4th quarter. Tesla is making cars as fast as it can to catch up to consumer demand. Another source told @Ray4Tesla, who closely monitors the news coming out of China, that estimated deliveries for the new Model Y SR RWD were pushed to the middle of next month and that Giga Shanghai was ramping up to meet domestic demand while also preparing a shipment to overseas markets. You can’t have high sales in China if you’re not delivering to China because you’re sending all the vehicles you can produce to other countries that don’t have Tesla factories. Europe has been waiting years for the Model Y, and Tesla is finally bringing the vehicle there while neglecting China for a while — something that is clearly going to lead to reduced “sales” in China.
A recent article I wrote based on Ray’s tweets as well as a Teslarati piece happened to receive a response from Elon Musk, who said that it was important to bear in mind that production is only as fast as the slowest part out of ~10,000 unique parts in a Tesla car. In other words, if one part out of 10,000 is unavailable, Tesla can’t produce cars.
Important to bear in mind that production is as fast as the slowest part out of ~10,000 unique parts in a car
— Elon Musk (@elonmusk) August 10, 2021
So, lower sales can always be a result of production bottlenecks rather than lack of demand as well. However, globally, Tesla is selling more EVs than it ever has before, so there doesn’t seem to be much problem with that at the moment. Whether or not we will see Tesla produce 1 million EVs this year remains to be seen. However, Tesla is much closer to this goal now than it’s ever been before.
Don’t let those headlines fool you into thinking that there’s no demand for Tesla in China or that Tesla is actually having a steep decline in sales. And let’s see how these outlets cover Tesla sales in China in September. For now, here are the sales charts for plugin vehicles in China in the first half of the year: