With automobile production halted in many countries and global car sales plummeting due to the coronavirus pandemic, the auto industry is recording its toughest time since the 2008 financial crisis.
In early March, General Motors announced that its first-quarterly sales in the U.S. fell by 7% while Fiat Chrysler’s sales dropped by 10% and Ford’s by around 9% in the same time period. Meanwhile, Toyota sales for March plunged 37%, Nissan by 29% and Honda by 48%.
In contrast, Tesla hit a record high for March in China despite the pandemic. The U.S. carmaker accounted for 25% of the country’s EV March sales with the China Passenger Car Association announcing that Tesla delivered 10,160 vehicles domestically, giving the automaker its best-ever results for a single month. Sales of the Model 3 were particularly strong with the Model S and X offering flagship status vehicle ownership. Surprisingly, Tesla managed this feat in a month when the overall car sales in China plunged by over 40%.
A couple of reasons led to this record-breaking effort. To boost sales in the world’s biggest auto market, Tesla fine-tuned its home delivery services to promote more potential customers to purchase a car. But by far the main reason for the sales spike is the fact that the firm started to deliver the first cars built at Tesla’s Gigafactory in Shanghai, which has enabled it to offer local consumers competitive pricing thanks a lineup with no tariffs.
Up until early January, when the Gigafactory went online, Teslas were considered U.S.-made vehicles and therefore subject to high tariffs. Also, sales had suffered in the wake of the U.S.-China trade war, and the fact that the Shanghai Gigafactory had to shutter its doors for a few weeks at the end of January in response to the government-mandated temporary plant closures.
On a global scale, London-based global information provider IHS Markit research reports that Tesla commands a worldwide electromobility share of 20%, while China’s BYD has 8% and BMW ranks in at a close third with 7%. For BMW, that’s sweet music with electrified car sales jumping some 15% in the first quarter in contrast to the firm’s sales drop of 20%. Of course when we speak of “electrified cars,” we are referring to a grouping of vehicles which include battery electric vehicles (BEV), plug-in hybrids (PHEV) and range-extended EVs (REX).
With EV demand growing in China, a country slowly reopening after the ill-affects of the pandemic, Tesla can look forward to increased demand for its expanding product range.