© Reuters. FILE PHOTO: Visitors check a Tesla Model 3 car at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China, Feb. 4, 2023. REUTERS/Florence Lo
SHANGHAI (Reuters) – Tesla (NASDAQ:) Inc’s electric vehicle (EV) sales in China rose last week but were still running short of the pace seen in the fourth quarter, indicating the bump from discounted prices in its biggest overseas market is waning.
The U.S. automaker nearly doubled weekly retail sales in the week of Feb. 20 to 10,703 vehicles versus a week prior, showed data from China Merchants Bank International (CMBI) on Tuesday, which tracks weekly retail sales based on car insurance registrations.
The tally was the highest after that of the week of Jan. 9 when Tesla sold 12,654 Model 3 and Model Y cars after lowering prices by as much as 14% on Jan. 6.
However, year-to-date average daily sales was 1,016 cars, whereas in October and November the figure was 1,317, indicating that price cuts may not be enough to accelerate sales in the first quarter compared with the fourth.
Tesla didn’t immediately response to a request for comment on Tuesday.
Sales are slowing in part due to an ageing product line, said Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight. Consumers are also delaying purchases while waiting to see if other EV makers cut prices, Zhang said.
The U.S. automaker has lagged competitors in China in introducing new models, improving navigation systems and adding luxury interior touches or white-glove customer service to meet a developing range of consumer tastes, analysts and fans said.
Chief Executive Elon Musk will announce the third part of Tesla’s “Master Plan” on its March 1 Investor Day, when the firm has to convince investors that even though rivals are catching up, Tesla can widen its lead with another leap forward.
While competition intensifies, Tesla aims to grow exports and expand into new markets to digest output from its factory in Shanghai. It has started delivering cars to Thailand and set up its first Supercharger station in the Southeast Asian country earlier in February.
Tesla had planned to keep Shanghai’s average weekly output at 20,000 vehicles in February and March, while its plant in German capital Berlin increased Model Y production to a third of that in Shanghai.
Tesla’s performance is in line with China’s overall EV sector, which has suffered from the end of a more than decade-long government subsidy. Its share of the country’s fragmented new energy vehicle market including both all-electric and plug-in hybrid cars slightly declined to 9% from 10% a year earlier, according to CMBI data.
Meanwhile, the market share of BYD Co (OTC:) Ltd surged to 37% from 27%, CMBI data showed. Smaller EV players such as Leap Motor and Great Wall Motor Co Ltd’s Ora are among those whose market share shrank.