Tesla faces tough competition in China even after pricing their Model Y aggressively. EV startups like Xpeng and Li Auto have increased their vehicle deliveries in the last year. While on the other hand, Nio has doubled the no of deliveries in 2020 while competing with Tesla. Yes, they are not close to the no of deliveries Tesla is making, but slowly, these companies are catching up. And the thing is one more EVs of these local companies sold means one less Tesla sold.
We have seen that after Tesla reduced the price of Model Y in China, the sale was huge. The company saw crowds like black Friday in their stores, and the response from the customers was also impeccable. But still, Tesla faces tough competition from local manufacturers as these companies report to have made record deliveries in the last quarter of 2020. The competition is also fueled by the fact that Tesla is still supplying constrained, and if their EVs are out of stock, people will flock to other alternatives.
Yes, Nio, X-peng, and other companies have performed fabulously in the past few months. At the same time, their stock prices have also increased a lot recently. But we have to note that their share prices, as well as the no of deliveries, are much lower than the global leader of EVs. Tesla has even joined the S&P 500 Index boosting its stock prices even higher.
Deliveries and growth of local EV companies in China
I do say that Tesla is losing some market share to local companies in China, but it is still much ahead. The total deliveries made by the three main local companies Nio, Li Auto, and Xpeng, in 2020 were 43,728, 32,624, and 27,041, respectively. All of these companies have seen a huge boost in the no of deliveries made in December. With Nio leading with total deliveries of 7000 units, followed by Li-Auto at 6,126 vehicles and X-peng at 5,700 deliveries.
Li Auto has now also been approved to start delivers of their EVs in Europe and Norway too. This is also supposed to increase their sales. And as more EV companies become available worldwide, it will surely take a bite from Tesla’s market share.
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