Tesla is on track to achieve one of its strongest quarters in China, with recent retail sales data indicating a positive response to the company's price cuts aimed at maintaining market share. Data from China Merchants Bank International, which monitors car insurance registrations, revealed that Tesla's retail sales in China reached 106,915 units between January 1 and March 19, averaging 1,371 units per day. This figure surpasses the daily average of 1,327 units sold in Q4, when Tesla achieved its best quarter yet with 122,038 cars sold.
Tesla capitalized on its higher per-car profit margins compared to other EV manufacturers, reducing the prices of its most popular models by up to 13.5% in January. This move sparked a price war, with competitors like BYD following suit over the next two months.
Despite Tesla's growth, it still lags behind BYD, which outperformed Tesla by more than five times in sales during January and February due to its broad selection of electrified products in China.
To address concerns about an aging product lineup, Tesla plans to introduce updated versions of the Model 3 and Model Y within the next two years. The company has also improved the suspension system on the Chinese-made Model Y since January, resulting in a smoother ride that has received praise on social media. Focusing on aspects such as energy efficiency, safety, and storage space in its marketing, Tesla aims to attract more pragmatic buyers in China.
In the first two months of this year, Tesla accounted for 7.9% of China's new energy car market, which includes pure electric and plug-in hybrid vehicles. This share represents a slight increase from 6.8% during the same period the previous year, based on Reuters' calculations using data from the China Passenger Car Association. In contrast, BYD's market share increased to 41%, up from 29% a year earlier.
