A lot has been said over the past several years regarding the immense size of China as a market for products and services. For instance, the country has the largest global market share in terms of cinema, and is actively courted by Hollywood films because any movie that fared poorly stateside could still hope to break even if Chinese audiences happen to love it. The same thing goes, as it seems, for electrical vehicles, particularly of a certain manufacturer with a factory on their soil. Tesla Inc., the company in question, confirmed just how big China’s market has been for them in a recent statement.
Tech Crunch tells us that Tesla may now be getting close to one-fourths of their total global revenue from China. Their filing with the US Securities and Exchange Commission for the quarterly period ended June 30, 2020 indicated that their Chinese revenue has ballooned to $1.4 billion in a year-to-year period. That amounts to a 102.9% increase which is enough to make Tesla revenue in China comprise 23.3% of the company’s $6 billion in the quarter covered. That makes for amazing growth considering the period being in the middle of the worldwide COVID-19 pandemic, with China being the virus’ origin.
Under normal circumstances trying to sell comparably pricey e-vehicles in China would put them beyond what Chinese consumers could afford. Tesla got around that by manufacturing them locally, after they got a sweet 50-year lease in Shanghai to build a Gigafactory complex. The initial product they have to offer Chinese buyers from as early as late 2019 was, at the time, the Tesla e-car to rave about: the Model 3 sedan proudly China-made. With their presence in the Chinese e-vehicle market secured, Tesla has begun initializing plans to begin manufacture of the new Model Y SUV in Shanghai as well.
Even with the spike in shipment of locally-made Tesla Model 3s in China, taken as a whole the electronic carmaker was still 4.8% down in their product deliveries compared to the preceding quarter. Again, this was because the safety protocols and restrictions were an added burden on the production of new cars; at some point work was even suspended due to COVID-positive cases being reported in the factories. Tesla can still take comfort in keeping themselves profitable for four straight quarters. Back in China, they have even started taking orders from local customers for the Cybertruck, which will not begin being put together in Gigafactory Shanghai for two more years.
Image courtesy of Yahoo News