Tesla Sales of Chinese-Made Cars Hit Record, as Nation’s Auto Market Shrinks

Altogether, China’s car makers and dealers sold 1.65 million vehicles in retail in November, a drop of more than 10% from October. Last month’s retail sales were “much lower than what we expected, it’s a very serious situation,” said CPCA’s general-secretary Cui Dongshu.

The EV Rivals Aiming for Tesla’s Crown in China

The world’s largest auto market has been hit by continuous disruptions to the supply chain caused by Covid-19 outbreaks and lockdowns this year, sometimes causing severe impact to China’s automobile factories and weakening consumer demand.

Volkswagen AG

and

Honda Motor Co.

had to halt production temporarily in November, citing Covid curbs which led to a shortage of car parts but also of workers, as many couldn’t head to work due to lockdowns. 

China’s overall exports fell in November at the steepest pace in two years, on top of slowing manufacturing activity and a sluggish recovery in the property sector. 

Appetite for new cars began to damp in September and then slipped further when growth slowed in October, prompting manufacturers to cut back production.

China’s car sales began a downturn earlier this year due to Shanghai’s lockdown, and didn’t see much of a rebound in the second  half of the year. By last month auto sales began to plummet at a speed comparable to what the car market experienced during the 2008 financial crisis, Mr. Cui said.

With Beijing’s easing of Covid restrictions on Wednesday there are hopes that new energy car sales could reach 6.5 million units by the end of the year as the CPCA projected, Mr. Cui said. Heading into the next year growth in car sales will likely recover, he said. 

New energy car sales remained a bright spot, continuing to grow as China phases out their national subsidies by the end of this year. Consumers with their eyes set on electric cars and plug-in hybrids will need to purchase before the year ends to take advantage of these subsidies applicable to vehicles priced at $43,000 or below. Tesla’s China rival

BYD Co.

sold almost 114,000 pure EVs last month. 

Tesla’s  last delivery record was in September, when it sold more than 83,000 cars from its Shanghai factory. Its latest boost can at least in part be attributed to consumers racing to buy a standard Model 3 or Model Y, before subsidies expire. To capture buyers, Tesla is giving around $860 in discount to those who will place orders for ready-made vehicles and pick them up during the last three weeks of December. The EV maker is also offering additional insurance discounts and extra loyalty points to buyers next month, according to Tesla’s China website. 

Write to Selina Cheng at [email protected]