Tesla China may have to worry about sales more than coronavirus

Sales data shows buyers hadn't flocked to the brand even before COVID-19 put the brakes on many of China's day-to-day operations, including car sales.

Sean Szymkowski
It all started with Gran Turismo. From those early PlayStation days, Sean was drawn to anything with four wheels. Prior to joining the Roadshow team, he was a freelance contributor for Motor Authority, The Car Connection and Green Car Reports. As for what's in the garage, Sean owns a 2016 Chevrolet SS, and yes, it has Holden badges.
Sean Szymkowski
2 min read
Tesla Model 3 deliveries in China
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Tesla Model 3 deliveries in China

It's certainly not the big start Tesla likely wanted in China.


Tesla's downright impressive gains in share price in recent weeks hinged on pretty much one thing: the start of local Tesla production in China to boost sales.

It appears local buyers weren't as avid about the brand as the market once perceived, however. According to Chinese car registration data cited by Bloomberg in a report Thursday, the number of new Teslas registered in January dropped by 43% from December of last year. Worse, the plunge comes before coronavirus fears and its effects really started to sweep over mainland China. The automaker didn't respond to Roadshow's request for comment.

The results appear to underscore the organic sales drop for what China calls "new energy vehicles." Sales have continuously slid in the past year, but the impact of the coronavirus will only make things worse for Tesla and any other automaker doing business locally.

Total, deliveries of new energy vehicles to dealers fell 54% in January.

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Tesla started delivering locally assembled sedans last month to great fanfare, though shortly thereafter the company suspended Tesla production in China as mandated by local Chinese officials to combat the spread of coronavirus. The country has quarantined numerous cities, ordered businesses to suspend operations and largely postponed any major Lunar New Year celebrations since the virus began to spread throughout January.

It's not all bad news, perhaps. According to the data, Tesla registrations are up 853 cars year over year in China, though it's hardly the booming number the US automaker likely expected. Tesla's largely bucked the trend of slowing EV sales in China and the country remains the largest market for battery-powered cars.

Tesla and many other automakers are likely in for a wild ride this year as coronavirus fears spread around the world. A slowdown in Chinese auto sales alone could prove disastrous for automakers, though Tesla specifically will charge ahead as the Model Y US deliveries will begin next month.

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Originally published Feb. 27.