The China Passenger Car Association (CPCA) recently released its monthly report, revealing that electric vehicle maker Tesla was able to sell an impressive 93,680 cars over the month. Tesla’s results suggest that concerns surrounding supply chain disruptions and weak consumer demand for electric cars are gradually dissipating.
The favorable conditions in the market are not exclusive to Tesla. While the overall car sales to dealers are projected to decline by 5.9% in June compared to the previous year, the CPCA still anticipates a 30% rise in new-energy vehicle sales this year. Part of this is due to the fact that it was not just Tesla that seems to be gaining momentum. Its rivals are, too.
Tesla’s local competitors, who responded to the EV maker’s aggressive price reductions, saw positive outcomes after a tumultuous period leading up to the Shanghai auto show in April. Automakers like BYD, and Li Auto, among others, saw a rebound in June deliveries. Some set new monthly sales records in June.
Edison Yu, an analyst at Deutsche Bank AG, noted in a recent report that China’s June EV sales exceeded expectations, indicating a potential normalization in consumer behavior. Yu noted that China’s electric vehicle sales last month “surprised to the upside as demand picked up, likely signaling some normalization in consumer behavior and release of pent-up demand from buyers taking advantage of low prices.”
The CPCA expects shipments of NEVs to dealers in June are estimated to have risen to 740,000 units. If these expectations are met, they will surpass the previous forecast of 670,000 units made ten days ago, as noted in an Automotive News report.
To stimulate sales in China, Tesla has continued to introduce additional incentives throughout the spring and early summer. In June, the company offered an RMB 8,000 ($1,100) incentive to selected buyers of inventory Model 3 sedans. Preferential low interest rates were made available for certain car loans as well.
In China, the base version of the Model 3 has a price tag equivalent to about $32,000, while the Model Y costs $36,440. In comparison, in the United States, these models are priced at $40,240 and $47,740, respectively, before incentives such as the $7,500 federal tax credit.
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