Mohit Oberoi
Tesla (NYSE: TSLA) sold 74,402 China-made electric cars in February – an increase of 12.6% on the previous month.
Despite the increase, the company continues to lose market share in the world’s largest automotive market.
In February, Tesla’s sales of China-made EVs (electric vehicles) rose 31.6% YoY and 12.6% as compared to January, data released by China’s automotive association showed – however, the sales trailed the record monthly highs that were reported in Q4 2022.
BYD, which last year surpassed Tesla to become the largest seller of NEVs (new energy vehicles) sold 193,665 cars in February, 119% higher than the corresponding month in 2022.
Notably, while Tesla is a pure-play BEV (battery electric vehicle) company, BYD also sells hybrids. In February, BYD sold 90,639 BEVs and 101,025 hybrids. The remaining were commercial vehicles.
Berkshire Hathaway is the largest stockholder of BYD and holds 11.8% of the company, first investing in BYD in 2008 and making good returns on the bet.
Last month, Berkshire Hathaway vice chairman Charlie Munger termed BYD as his “best investment.”
Last year, Munger termed Tesla a “minor miracle.” Notably, Tesla’s success in producing cars at scale has impressed even the most ardent bears and at its investor day on Thursday, the Elon Musk-run company said that it has achieved the milestone of producing 4 million cars cumulatively.
The investor day was, meanwhile, a damp squib event and TSLA stock tumbled as the company’s announcements fell short of lofty expectations.
Deutsche Bank analyst Emmanuel Rosner said that he was “disappointed” after the event, he maintained his buy recommendation on Tesla stock.
Tesla Loses Market Share in China, February Deliveries Show
According to data from China Merchants Bank International, Tesla’s market share in China fell to 9% in February 2023 as compared to 10% in the corresponding month in 2022. At the same time, BYD’s market share rose by 10 percentage points to 37% in the month.
China is the world’s largest market for NEVs and its penetration levels are higher than even the Western world.
According to preliminary research from LMC Automotive and EV-Volumes.com, fully electric vehicles accounted for 19% of all the cars sold in China last year while the commensurate figure for Europe was 11%.
Looking at the US market, all-electric vehicles accounted for 5.8% of sales in 2022 as compared to 3.2% in 2021 – US EV penetration levels might rise after the Inflation Reduction Act and even Tesla cars are eligible for the $7,500 EV tax credit.
The company also lowered car prices in the US to make them more affordable for buyers, also lowering prices in China in a bid to spur demand.
Key Takeaways from Other Chinese EV Companies’ February deliveries
NIO delivered 12,157 cars in February—a YoY rise of 98.3%. The company’s cumulative deliveries reached 310,219 at the end of February and this year, NIO has hit the new milestone of delivering its 300,000th car.
Last year, investment firm Baillie Gifford also increased their stake in NIO, with many analysts see NIO as a worthy competitor to Tesla – read our guide on how to buy NIO stock.
Xpeng Motors meanwhile continued to disappoint with its report, delivering 6,010 vehicles in February which was lower than the 6,225 cars that it delivered in February 2022.
Li Auto delivered 16,620 vehicles in February, a YoY rise of 97.5% – the company’s deliveries also increased on a sequential basis.
Its cumulative deliveries reached 289,095 at the end of February and it has already surpassed Xpeng Motors in terms of cumulative deliveries and is not looking set to surpass NIO as well.
During Tesla’s Q4 2022 earnings call, Musk was all praise for Chinese EV companies, Ford also sees Chinese EV companies as strong competitors as it tries to scale up its EV output.
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This article was written for Business 2 Community by Mohit Oberoi.
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