Sales of Tesla’s (TSLA) EVs made in China surged by 19.2% year-over-year in September to 88,321 vehicles, according to data from the China Passenger Car Association (CPCA). This was a new high for the EV major since March. Furthermore, Tesla’s deliveries of its Model 3 and Model Y vehicles rose by 1.9% from August.
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In fact, Tesla China sold a record 249,135 vehicles during the third quarter, up 12% year-over-year. These sales comprised more than 50% of the company’s global vehicle deliveries of 462,890 in the third quarter.
How Did TSLA Execute a Turnaround in China?
Tesla is facing rising competition in China from local Chinese companies like BYD (BYDDY) as more Chinese consumers are opting for better and cheaper EV models or hybrid vehicles that offer a better driving range. In fact, the company’s Chinese rival BYD recorded a staggering increase of 45.56% year-on-year in passenger vehicle sales in September, totaling 417,603 units.
In order to rise above this competition, Tesla has been implementing various incentives to attract consumers. This includes extending its zero-interest financing scheme for some Model 3 and Model Y vehicles in China for an additional month, which will now last until the end of this month. Moreover, the automaker plans to manufacture a six-seater version of its popular but aging Model Y in China, with production expected to begin in late 2025.
In addition, Tesla is set to unveil its robotaxi on October 10 and is on track to launch its Full Self-Driving (FSD) advanced driver assistance software in both China and Europe next year.
Is Tesla a Buy, Sell, or Hold?
Analysts remain sidelined about TSLA stock, with a Hold consensus rating based on 11 Buys, 16 Holds, and eight Sells. Over the past year, TSLA has declined by more than 5%, and the average TSLA price target of $207.83 implies a downside potential of 15% from current levels.
