Tesla Inc TSLA, which navigated fairly well through the negative press in China in the second quarter, seems to have come up short in July.
What Happened: Tesla sold 8,621 vehicles in China in July, Reuters reported, citing data released by the Chinese Passenger Car Association. CPAC said Tesla's wholesale sales in China came in at 32,968 units, of which 24,347 were exported.
In June, the EV giant's wholesale sales stood at 33,155 units, of which 5,017 vehicles were exported.
Overall, wholesale sales of Tesla still represented a modest 0.6% increase. The weakness was in domestic sales.
The company's July China sales represented a 69.4% decline from the 28,138 vehicles it sold in China in June. China sales dipped about 22% year-over-year.
Related Link: EV Stock 2021 Halftime Scorecard: Tesla Bogged Down By China Worries, Nio Underperforms And More
Tesla's July Sales Lags Chinese Peers Even as Tesla's performance in China slipped in July, its Chinese rivals had put in a strong showing.
Nio Inc-ADR NIO delivered 7,931 vehicles in July, down about 2% month-over-month. Nevertheless, it represented a 125% year-over-year increase.
Other U.S-listed Chinese EV makers fared even better. Xpeng Inc-ADR XPEV delivered a record 8,040 vehicles, up 22.5% month-over-month and 228% higher than a year ago.
Li Auto Inc LI sold 8,589 units of Li Ones, its sole EV model. This marked an 11.4% month-over-month increase and a 251.3% year-over-year climb.
Making Sense of Tesla's Soft Numbers: The July numbers underline Tesla's quest to make Gigafactory Shanghai its export hub. With an inordinate delay in bringing the Gigafactory Berlin online, the company shipped the Model Y vehicles from China to be sold in Germany.
Tesla bear GLJ Research's Gordon Johnson has a different take on the softness.
"It seems clear to us that Tesla has over-built domestic Chinese capacity relative to demand in the world's largest, and fastest-growing, auto market (i.e., China)," Johnson said.
This is triggering both excessive price cuts and excessive exports, he added.
The analyst believes homegrown rivals are clawing their way up.
At last check Tuesday, Tesla shares were down 0.13% at $712.86.
Related Link: What to Expect From Tesla's AI Day Scheduled for Aug. 19
Photo: Tesla
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