Tesla China shipments surge to a record as plant fires back up

Huge demand: A Tesla showroom is seen in Shanghai. An unprecedented 77,938 of Tesla’s China-made EVs in June went into the local market, while just 968 were shipped abroad. — Reuters

SHANGHAI: Tesla Inc monthly shipments of China-made vehicles rebounded to record in June, a stunning recovery after restrictions to stop the spread of Covid in Shanghai knee-capped the carmaker’s factory in the financial hub.

The US electric vehicle (EV) pioneer delivered 78,906 vehicles last month, well over double the 33,155 in the same period a year ago and up 145% month-on-month, data from China’s Passenger Car Association (PCA) showed.

An unprecedented 77,938 of the EVs made in June went into the local market, while just 968 were shipped abroad.

Tesla’s monthly deliveries from China sunk to as low as 1,512 units in April with zero exports as Shanghai’s weeks-long punitive lockdown forced the company to suspend production for around three weeks.

Tesla went to extraordinary lengths thereafter to get the factory back up and running, bringing in thousands of workers under an elaborate so-called closed loop system that kept them on-site, separated from family, and tested regularly.

Employees were finally let out on June 10, after the plant had resumed round-the-clock production and supplies and logistics were essentially back to normal.

Overall, passenger vehicle sales in China increased 22% year-on-year to 1.97 million units in June, the PCA data show. New-energy vehicle retail sales came in at 532,000, up around 131% from June 2021.

Demand for combustion engine cars is expected to stay flat for the next couple of months before rising strongly in the fourth quarter as buyers rush in before government tax cuts for such vehicles, aimed at spurring automobile sales, are phased out at the end of 2022, the PCA said earlier this year.

BYD Co, the Chinese automaker backed by Warren Buffett, put in a strong showing in June too, delivering 133,762 new-energy cars, including pure electric models and hybrids.

China in May cut the purchase tax levied on some low-emission passenger vehicles by half, building on previously announced measures to support businesses and consumer spending.

Several local governments and automakers have since pitched in with subsidies and incentives to entice buyers.

While June was a bumper month for Tesla, shipments for July may not be so hot.

In efforts to ramp up output from Shanghai longer term, the company plans to partly suspended manufacturing capabilities at various points through early August to upgrade production lines. — Bloomberg