Tesla sales are rising in China thanks to incentives put in place by the automaker on top of state incentives going away by the end of the year.
Is enough to save Tesla’s quarter and its whole year?
Tesla aims to deliver a record number of more than 515,000 vehicles in Q4 in order for its sales not to be down for the whole year. That’s ~30,000 more vehicles than Tesla’s last record quarter, which was Q4 2023.
China is Tesla’s most important market and the world’s most important EV market.
In many ways, the Chinese can make or break Tesla’s record delivery goal for the quarter.
The latest insurance data is in for November, and it points to Tesla delivering just short of 70,000 vehicles – up significantly year-over-year (via Car News China):
However, while Tesla’s domestic sales are up in the Chinese market, Tesla’s wholesale from China (all cars built domestically for both the local market and exports) are down in November.
The domestic results are expected to be even stronger in December due to the incentives in place.
Tesla recently introduced a new ¥10,000, the equivalent of $1,380 USD, discount on Model Y, its most popular vehicle, if buyers take delivery by the end of December.
It’s the first time in a while that Tesla is discounting vehicles in China, but the automaker has been offering subsidized 0% interest loans to encourage sales most of the year.
On top of that, China has a ¥20,000 yuan ($2,700 USD) cash for clunkers incentive for people who exchange their older and higher emission vehicles for an electric car. The incentive is going away next year, which is incentivizing EV sales at the end of this year.
Electrek’s Take
Things are looking good for Tesla in China. With this momentum in November and all the incentives in place for December, it will likely be a record quarter for Tesla.
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If you make discounts, discounts, discounts in the last quarter to save the annual result. What should it be next year? Tesla may have learned from the Model S/X and Model 3 that a facelift at Tesla does not boost sales. Should a cheaper model come on the basis of the previous Model Y, as rumors say, then will only be at the expense of the previous models. I don't see a strategy to get over the next few years. And please don't come to me with autonomous driving. This is as far from reality at Tesla as with no other competitor.
However, the question is whether it will be enough to counter the sales decline in Europe and cover the ~30,000 extra vehicles that Tesla needs to deliver to achieve its goal.
I think China should cover one of those issues, but not both. North America, which is more opaque to track, will have to cover the other.
Tesla has record incentives in place in the US and Canada to address this. I think it has a real shot at delivering 515,000 vehicles in the quarter.
But at what cost, with all these incentives, and what does it mean for Tesla in 2025? I guess that’s a problem for later.
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