Tesla is about to release its financial results for the first quarter 2017 and it is expected to announce record revenue thanks to record deliveries of the Model S and Model X.
We now learn through registration and import data that Tesla saw important increases in deliveries in the Chinese and Hong Kong markets, which seem to have made the difference for Tesla during the quarter.
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Tesla China tripled its sales in 2016 to over $1 billion with over 11,000 deliveries.
The streak continued during the first quarter 2017. The company imported almost 5,000 vehicles from January through March according to data from JL Warren Capital. Fortune reported:
“Tesla imported 4,799 Model S and Model X SUVs into China in the first three months of this year, 350% more than the first quarter of 2016, according to data from JL Warren Capital, a New York-based researcher. If Tesla keeps up the pace throughout this year, the number of imports would nearly double its total last year. But since Tesla sales have increased towards the end of the calendar year in the country, JL Warren Capital’s data shows, Tesla is more likely to more than double last year’s sales.”
It means that mainland China alone represented about 20% of Tesla’s deliveries during the first quarter.
But the special administrative region of Hong Kong also made a big difference during the quarter. As we previously reported, Hong Kong started an aggressive phaseout of its electric vehicle incentives that made it a leading EV market dominated by Tesla.
When the phaseout was confirmed in February, there were over 7,000 electric vehicles in Hong Kong with Tesla still maintaining over 80% market share. In March alone, 2,964 electric vehicles were registered in the city just before the start of the change in incentives in April – or about 3,908 during the first quarter.
The increase is presumably due to buyers rushing to get their EVs before the tax exemptions are removed.
While the registrations by automaker haven’t been released yet, Tesla is expected to maintain the same market share and therefore, it’s likely to have delivered over 3,000 vehicles in Hong Kong during the first quarter.
The phaseout happened faster than anticipated, but Locky Law from EV advocacy group Charged Hong Kong says that Tesla moved quickly to support the local demand before the end of the incentives and focused its right-hand drive production to the market during the period in order to rush deliveries in time.
It looks like it paid off, but now sales are expected to go down to near zero going forward – like it did in Denmark after a similar phaseout of the EV incentives.
On the other hand, mainland China should remain a strong market for Tesla. They are also phasing out their direct EV incentives, but Tesla didn’t have access to all of them because they import their vehicles and China also has a strong ZEV mandate that will force automakers to keep growing the local EV market.