Sales of electric cars in China more than tripled in January to 158,000 a year ago, although according to the China Passenger Car Association it fell by 24% monthly. Tesla share has risen.
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Tesla (TSLA) sold 15,484 vehicles in China, a significant drop from the 23,804 cars in December.
The January figure contains Model 3s and Ys made in the Shanghai Gigafactory. Tesla is the top-selling EV manufacturer in China. But competitors in China are narrowing the gap. Nine (NIO) said it delivered 7,225 vehicles in January, more than four times the number for January 2020. Xpeng (XPEV) achieved a six-fold increase with 6,015 deliveries. And Li Auto (LI) produced 5,379 vehicles, an increase of 356% year-on-year.
Tesla is also likely to increase competition in China from US carmakers. Last month, Ford (F) said it would build its Mustang Mach-E for the first time in China to appeal to Chinese customers.
Retail sales of all passenger vehicles in China rose 26% last month to 2.16 million vehicles, the strongest growth since September 2016. The downturn of Covid-19 last year hit the car market hard. Sales fell by 20% in January 2020 and ended 7% less than the previous year.
According to the CPCA, car sales grew by 7% in 2021, but the second half of the year could be warned due to the shortage of chips affecting the entire industry.
Meanwhile, Chinese authorities told Tesla on Monday that they need to tighten quality and safety measures. Tesla, which has expanded rapidly in China, largely thanks to subsidies from the Chinese government, is plagued by consumer complaints.
According to Reuters, officials met with Tesla to discuss reports of battery fires, unexpected acceleration and failures in software updates. Officials urged Tesla to comply with China’s laws and protect customers’ rights.
Tesla last week recalled more than 36,000 Model S and Model X vehicles imported from the US due to touch screen problems. The recall follows another one in October that affected more than 48,000 imported cars of the same models in China due to faulty suspension systems.
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Tesla Stock
Shares rose 1.3% to 863.42 on the stock market today. Tesla shares received a boost on Monday when the company announced that it would buy $ 1.5 billion in Bitcoin and accept the cryptocurrency as a means of payment.
An outbreak attempt over a high, tight flag pattern on January 25 with an entry at 884.59 did not go very far, according to MarketSmith chart analysis. Tesla shares, which are on the IBD Leaderboard, have fallen, causing the 7% -8% sell-off.
Tesla share also recently complied with one key rule of a climax slump: a gain of 25% to 50% within three weeks after a long run of previous breakouts, which may indicate that a share reaches its peak and due to a setback.
Among other EV manufacturers, the Nio share rose 4.2%, Xpeng rose 1.45% and Li Auto slipped 0.1%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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