Responding to sluggish Chinese spending amid flagging economic growth and rising competition from domestic Chinese players such as BYD, Tesla introduced a range of offers this spring, including insurance deals, discounts on certain paint choices and a zero-interest loan of up to five years.
That helped the U.S. automaker boost sales in July and August, according to data from the China Passenger Car Association (CPCA), after two straight quarters of declining deliveries.
Analysts said the trend continued through the quarter and 12 of them, polled by LSEG, expect the Elon Musk-led company to deliver 469,828 vehicles, which would be its best third quarter, up from about 435,000 vehicles a year earlier.
"China, which accounts for one-third of Tesla's sales, is a major growth driver," said Scott Acheychek, chief operating officer of REX Financial, which offers exchange-traded funds that track Tesla's stock performance.
Deutsche Bank analysts estimated Tesla to deliver about 139,000 Model 3 sedans, 296,400 Model Y SUVs, a combined 13,350 of its larger Model S sedans and Model X SUVs and about 13,500 Cybertruck pickups in the third quarter.
Sales in China were also boosted by increased government subsidies meant to encourage consumers to swap their gas-guzzling vehicles with battery-powered ones.
Tesla cars also became eligible for government purchases in the country, with its best-selling Model Y SUV included in a list of vehicles government entities can purchase as a service car.
Ken Mahoney, CEO of Tesla investor Mahoney Asset Management, said the boost from China, along with benefits of a recent interest rate cut by the U.S. Federal Reserve, could help Tesla match the record 1.8 million vehicles delivered in 2023.
Musk earlier this year said Tesla was on track for higher deliveries in 2024.
Tesla started deliveries of the Cybertruck late last year, and the EV maker expects to ramp up production to 250,000 units next year. It is yet to release official production or delivery numbers for the model.
With slowing demand for EVs in the U.S. and a lack of subsidies in Europe, Tesla delivered about 831,000 vehicles in the first half of this year. To prevent a drop in 2024 deliveries, it needs to hit about 979,000 vehicles in the second half.
That will be crucial to allay investor concerns around future EV demand even as they focus on Tesla's unveiling of a robotaxi product on Oct. 10 - a sharp shift in the automaker's strategy since ditching its affordable car project and one that some see unlocking trillions of dollars in value for Tesla.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
