Tesla bucks China car slump as November registrations soar
Tesla Inc. bucked the downturn in the world’s biggest electric-vehicle market last month as its new-car registrations in China soared 14-fold, giving the Model 3 maker some momentum as it prepares to begin deliveries from its Shanghai factory.
Registrations of Tesla vehicles climbed to a five-month high of 5,597 in November, compared with 393 a year earlier, according to state-backed China Automotive Information Net, which gathers and reports car-industry data. Tesla shares rose a fifth consecutive day, opening up as much as 2.2% to $413, a new intraday record.
Fears that China, the world’s biggest auto market, would raise tariffs on U.S.-made cars in December probably helped bolster sales, according to Bloomberg Intelligence auto analyst Steve Man. But that threat subsided last week after the U.S. and China agreed to the first phase of a broader trade agreement.
The figures add to the recent optimism that’s helped Tesla’s stock surge. They also stand out because the Chinese electric-car market has been shrinking for five months straight. Still, billionaire Elon Musk’s success in the country will largely hinge on how soon he can get Tesla’s new Shanghai plant, its first outside America, up and running so the company can lower prices and spur demand for its cars.
There’s much at stake for Tesla in China as the country accounts for about half of the world’s electric-vehicle sales and represents the company’s biggest market after the U.S.
Tesla’s China-built Model 3s are set to start at about $50,000, slightly cheaper than imported versions. The company may lower the locally built model’s price by 20% or more next year as it starts using more local components and reduces costs, according to people familiar with the matter.
Last year, sales of Tesla and other American-made vehicles were subject to a 25% punitive tariff that was rolled back at the start of 2019 as China and the U.S. moved closer to a trade agreement.
Registrations are among the few high-frequency indicators of demand for Tesla’s cars in China, as the company doesn’t report monthly sales. But registrations and sales figures don’t always end up matching up.
A Tesla representative in China declined to comment on the CAIN data.
– With assistance from Matt Turner.