Sales of Tesla EVs made in China surged 29 percent in May

Sales of Teslas produced in China surged last month, despite a recent wave of bad publicity for the electric vehicle (EV) maker.

Tesla has endured a spat of bad publicity in China lately, but that didn't appear to dent demand for its vehicle in China last month [File: Bloomberg]

Tesla Inc.’s China shipments rebounded in May from April – when production was temporarily suspended for maintenance – though analysts are watching to see if a run of bad publicity will translate into reduced demand in the months ahead.

The electric-car pioneer reported wholesales of 33,463 locally made vehicles last month, compared with 25,845 in April, China’s Passenger Car Association data showed Tuesday. Of the May figure, 11,527 were exported, compared with the 14,174 vehicles that were shipped overseas, mostly to Europe, last month. The number of cars that went to the local market alone in May soared 88% from April.

The wholesale figures may not necessarily reflect the level of retail demand Tesla fields directly rather than through traditional dealerships. Investors have been concerned about blowback from a high-profile protest at the Shanghai auto show in mid April and a spate of crashes that may have soured public opinion toward the California-based company. Customer orders fell by nearly half in May from April, according to tech news website The Information. Representatives from Tesla in China declined to comment on the report last week.

PCA Secretary General Cui Dongshu said he expects even higher local sales of Tesla vehicles in June.

“Sales of Tesla will hardly be affected by the short-term negative impact,” Cui said at a briefing. “Sales of the Model Y are expected to be higher than the Model 3, particularly in China where SUVs are more popular than sedans,” he said, referring to Tesla’s entry-level car and its more spacious model.

Shares of Tesla pared an early gain Tuesday of as much as 3% to trade up 1.2% to $612.42 as of 9:53 a.m. in New York.

After initially enjoying a dream run in China – winning all-important government support to open a factory near Shanghai – Tesla has attracted unwanted publicity recently. In an incident that quickly went viral on social media, a disgruntled owner climbed atop one of Tesla’s display vehicles at April’s auto show and shouted that her car’s brakes had failed, causing a crash. That was quickly followed by two rebukes from government entities that said the EV maker should respect Chinese consumers and comply with local laws.

China is key to Musk’s growth ambitions: it’s already the world’s largest EV market and the government is championing the industry to help meet its goal of making the country carbon-neutral by 2060. Customers in China currently need to wait between one-to-three weeks to take delivery of a locally built Tesla.

Last month, a traffic policeman was killed and another injured in a crash involving a Tesla. The car tested normal and the driver should take full responsibility for the accident, the Beijing Daily reported Sunday, citing the local police bureau. In another incident, a Tesla rear-ended a truck, killing the driver of the EV, according to a Global Times report.

While hundreds of people die on China’s roads each day, crashes involving Tesla models attract intense public interest, with footage quickly spreading on social media.

In another setback, some local governments and official institutions are reviewing Tesla ownership among their staff, citing concerns the cars pose security risks, Bloomberg reported last month. The EVs have also been banned from some military complexes and housing compounds because of concerns about data being collected by in-built cameras. Tesla has moved to reassure authorities, saying any data collected in China is stored locally.

Overall, shipments of cars, sport utility vehicles and multipurpose vehicles rose 1.1% in May from a year earlier to 1.66 million units, the data showed. Versus last month, total wholesales increased 0.8%. New-energy vehicle shipments, which include electric cars and plug-in hybrids, increased 177% from a year earlier to 185,000 units.

SAIC-GM-Wuling Automobile Co. sold the most new-energy vehicles last month, followed by BYD Co. and then Tesla in third place. The PCA also Tuesday adjusted its forecast for NEV annual sales to 2.4 million cars from 2.2 million. It noted that China’s policy to allow families to have three children should benefit the automobile market, particularly in the seven-seater category.

Read more: Tesla Loses Executive Who Played Key Role Ramping Up Model 3

(Updates with opening shares in sixth paragraph.)
–With assistance from Ocean Hou.

Source: Bloomberg