Three Chinese electric vehicle (EV) posted record sales in late June, a fact that could create problems for Tesla.
Meanwhile, China's largest electric vehicle maker, BYD, sold nearly 1 million electric and hybrid cars in the second quarter of the year, according to Bloomberg.
During the same period, Nio delivered over 57,000 vehicles — up 144% year-on-year. Zeekr, a subsidiary of Geely Automotive, posted a record June with over 20,000 deliveries — up 89% year-on-year.
Read more: BYD: Presents hybrid drivetrain with enormous autonomy
Despite concerns about tariffs from the US and the European Union, sales at these three companies have been boosted by price cuts, the introduction of cheaper models and increased demand from Russia, where Western competitors have withdrawn.
Those numbers are likely to worry Tesla and its CEO, who once underestimated Chinese companies. The U.S. electric vehicle company reports second-quarter deliveries on Tuesday, while first-quarter results showed weak demand for electric vehicles.
Analysts expect Tesla’s total deliveries to fall 6% from April to June, according to Reuters. Tesla has made significant moves to win back customers. At the end of the first quarter, Elon Musk joined the electric vehicle price war, cutting prices on select Tesla models. During the first-quarter earnings conference call, Tesla also announced a long-awaited cheaper electric vehicle. In late May, Tesla offered Chinese customers the chance to visit its factory in Fremont, California, if they bought a car this summer.
“Tesla’s fundamentals are in serious trouble right now, and we generally expect negative revisions,” Barclays analyst Dan Levy told CNBC last month. One of the company’s biggest challenges is stagnant sales ,he noted. Levy predicted an 11% drop in June deliveries, missing analysts’ estimates.
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The optimistic scenario for Tesla
Despite the strength of Chinese electric vehicle companies, one analyst is confident that Tesla is poised for a turnaround amid growth in China and the launch of Robotaxi, scheduled for August.
“We have seen signs of price stabilization for Tesla in recent months, as it appears that the big price cuts are now a thing of the past,” said Wedbush analyst Dan Ives. A staunch Tesla supporter, he said demand in the important Chinese market is improving as customers realize that there will be no more price cuts.
Moreover, analysts have long stressed that the real value of some U.S. electric vehicle companies is not just their cars, but also the technology they can sell to other customers. “We continue to believe that Tesla is more of an AI and robotics company than a traditional automaker,” Ives wrote on Friday.
Read more: BYD: Reduces EV prices even further
The same goes for U.S. competitor Rivian, which recently announced a $5 billion investment from Volkswagen . Goldman Sachs analysts noted in January that software is one of Rivian ’s strongest areas , calling it “a core element of its value proposition and opportunity for profitability.”
Source: businessinsider
