All eyes on Tesla’s recovery in China — rumors of massive backlog

Tesla Gigafactory Shanghai Exterior

Tesla, like many other automakers, is struggling to get operations to something resembling normal within the next month in order to save its second quarter financially.

For the California-based automaker, China is going to be very important this quarter, and there are rumors that Tesla is enjoying a massive backlog of orders in that market.

According to local registration numbers, Tesla only delivered more than 3,000 cars in China in April.

That’s despite its Shanghai Gigafactory reportedly producing 3,000 vehicles per week and the Chinese car market recovering nicely after the pandemic.

However, Tesla’s sales in China were negatively affected in April due to the country modifying its EV incentives, which made the Model 3 ineligible due to its starting price.

In May, the automaker managed to reduce the price of Model 3 in order to be again eligible for the country’s EV incentives.

Furthermore, it’s likely that many customers decided to wait for the longer-range version of the Model 3, which Tesla announced in early April.

Tesla just started deliveries of the new version of the made-in-China Model 3 last week.

There are reports coming out of China stating that Tesla has accumulated a massive backlog of 15,000 orders for the Model 3 Long Range RWD.

Electrek’s Take

While Tesla’s performance in April in China had some people worried, I think they are currently in a great position to finish the quarter strong.

With the base Model 3 now being cheaper than ever with the lower price and EV incentives, Tesla likely got a boost of orders for it in early May.

On top of it, if the rumor backlog for Model 3 Long Range is true, and it doesn’t sound ridiculous, it would put Tesla in a great position to sell everything it can make in China in May and June.

I can see Tesla delivering 22,000 to 25,000 cars in May and June, bringing the quarter to a total of 25,000 to 28,000 vehicles in China.

That’s likely going to be more than all of Tesla’s other markets combined in Q2, but I can now see Tesla reaching over 40,000 deliveries during the second quarter, which would be great, considering the circumstances.

The good news is that Tesla’s current demand in China is likely going to spill to Q3, which could mean over 40,000 cars in China alone during the period. If we start seeing a recovery in other markets at that time, Tesla could be going back to growth by the end of the year, which would be impressive with the current state of the economy.

What do you think? Let us know in the comment section below.

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