Tesla Inc. TSLA saw strong growth in China, with registrations of its electric cars almost doubling in March from the previous month, data from state-backed China Automotive Information Net or CAIN showed Sunday, according to a report by Bloomberg.
What Happened: Tesla’s China registrations surged to a record 34,635 in March from the 18,155 registrations in February when sales slowed down due to the week-long Lunar New Year holidays, as per CAIN data. The registrations in March were almost triple from the number a year earlier when sales were impacted by the coronavirus lockdowns in China.
Why It Matters: Tesla delivered 184,800 vehicles in the recent first quarter, handily beating analysts’ expectations, reflecting strong reception of the Model Y in China.
The U.S. remains Tesla’s largest market and accounted for 48.2% of the company’s revenues last year, while China made up for 21.1% of the automaker’s total sales and is the company’s second-largest market.
However, Musk has predicted that in the long term, China will become Tesla’s largest market and the place “where we produce the most vehicles and have the most customers.”
Tesla faces stiff competition from local rivals like Xpeng Inc. XPEV, Nio Inc. NIO, Li Auto Inc. LI and Warren Buffett-backed BYD Company Limited BYDDF in the Chinese EV market, which is the world’s largest.
The U.S. automaker has been working to expand Gigafactory Shanghai to mass-produce the Model Y for sale in China and export to neighboring countries, Australia and parts of Europe.
Price Action: Tesla shares closed 0.1% higher on Friday at $739.78.
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