Tesla revenues in China hit $1.4 billion in Q2, up 102.9% y-o-y
Published: Jul 28, 2020 10:36 PM

View of a Tesla store in Shanghai File photo: IC

US electric vehicle (EV) giant saw its revenues in the Chinese market surge by 102.9 percent in the second quarter of the year, registering $1.4 billion.

The US remains Tesla's largest market with $3.1 billion revenues in the quarter, down 11 percent from the same quarter last year, according to a filing the company sent to the US Securities and Exchange Commission on Tuesday.

China has become the US auto giant's second largest sales market, raking in 23.19 percent of its total revenues in the quarter. Tesla, now the world's most valuable carmaker, reported revenue of $6 billion in the quarter, beating expectations.

In the filing, Tesla said its Model 3 was its best-selling EV during the quarter in China, where its Gigafactory in Shanghai offers locally-produced Model 3s with industry-leading standard equipment at a lower price point than competing mid-sized premium sedans even before the impact of government tax incentives.

"Local manufacturing is critical to our expansion and sales in China, which is the largest market for EVs in the world. Our vehicle sales in China have been negatively impacted in the past by certain tariffs on automobiles manufactured in the US, such as our vehicles. If we are not able to successfully and timely ramp Gigafactory Shanghai, we may continue to be exposed to the impact of such unfavorable tariffs, duties or costs to our detriment compared to locally-based competitors," read the filing.

During its second quarter earnings report last week, Tesla said it is building a production line for its Model Y model, and the first batch is planned to be delivered in 2021. 

The company said the localization of auto parts would reach 80 percent by the end of this year. Now the localization rate is around 40 percent.

Data from the China Passenger Car Association (CPCA) shows Tesla sold  14,954 made-in-China Model 3s in June, up 35 percent compared with the previous month, accounting for 23 percent of China's total EV sales.

The California-based electric carmaker is ambitiously pursuing its China dream and increasing hiring, in a move industry analysts believe will make the nation Tesla's top market.

As the firm ramps up production in China, it has recently launched a hiring spree in Shanghai including 970 people in four types of positions: production operator, quality inspector, logistics forklift worker and security guard.

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