Tesla Sold 56,000 China-made Vehicles in September, the Highest Since its Shanghai Factory Began Producing Cars in 2019

author: Eric Walz   

A Tesla Model 3 on the assembly line of the company's Shanghai factory in Jan 2020. (Photo: Reuters)

Electric automaker Tesla continues to ramp up production at its factory in Shanghai. The California company sold 56,006 China-made vehicles in September, according to data from the China Passenger Car Association (CPCA). It's the highest number of vehicles since Tesla's Shanghai factory began producing cars nearly two years ago.

Tesla currently builds Model and Model Y at its factory in Shanghai. The September sales included 3,853 vehicles that were exported, according to the CPCA.

The numbers are a big jump from August when Tesla sold 44,264 China-made vehicles. However, nearly 75% of them (31,379 vehicles) were exported to other countries, mainly in Europe. 

Tesla's China-made vehicles sales of 44,264 in August are roughly 30% higher than the 32,968 vehicles it sold in July. The numbers indicate that Tesla is ramping up production at its Shanghai factory to meet demand.

Tesla's factory in Shanghai, which beagn producing cars in Dec 2019, allows it to avoid tariffs by building cars locally for the China market, which is the world's biggest and an important one for Tesla to remain profitable. The factory was designed to manufacture up to 500,000 vehicles per year.

However, Tesla is also facing growing competition from Chinese EV startups XPeng and NIO Inc. XPeng reported its highest ever monthly deliveries in September of 10,412 electric vehicles, representing a 199% increase year-over-year, and a 44% increase from August. XPeng also celebrated the production of its 100,000th electric vehicle on Monday.  While XPeng's local rival NIO also delivered over 10,000 vehicles last month. 

Tesla is also facing new competition from China's other automakers, many of which are developing fully-electric models for the first time.

Tesla's China-built vehicle sales have rebounded since the first half of the year. In July, sales of China-made Tesla vehicles fell by 69% to just 8,621 cars compared to June when Tesla sold 28,138 electric vehicles in China. 

Tesla's sales decline can be attributed to its clashes with regulators earlier this year. In China, the government plays a larger role in the safety and oversight of the auto industry 

After repeated complaints from customers in China, including reports of faulty brakes on the China-made Model 3, Tesla found itself under fire from Chinese regulators and was forced to answer to complaints surrounding safety of its vehicles. Tesla was also criticized for how its handled customer complaints in China. 

In March, Tesla also came under scrutiny when the Chinese military banned its cars from entering its complexes, citing security concerns over the cameras installed in its vehicles. Tesla downplayed the threat, assuring customers on Chinese social media that the vehicle's external cameras are not available outside of North America.

In response, Tesla said it would boost its engagement with regulators and expand its government relations team. The company's willingness to work with local regulators and to better address customer complaints appears to have helped Tesla regain consumer confidence in China, which resulted in an uptick in sales.

However, overall vehicle sales for the month of September are down in China. The CPCA said passenger car sales in China totalled 1.6 million vehicles in September, down 17% from a year ago.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.