Tesla’s China factory is back to full speed. The world’s biggest car market isn’t.
Tesla (TSLA) – Get Tesla Inc. Report notched a big jump in China sales and exports last month, an industry group confirmed Thursday, as the carmakers Shanghai gigafactory returned to full pace following shutdowns linked to Covid restrictions and a scheduled upgrade.
The China Passenger Car Association (CPCA) said Tesla sold 76,995 China-made cars last month, essentially matching its earlier estimate of 77,000 units. Around 42,463 units of its Model Y and Model 3 sedans were exported from China, CPCA said.
The August figures were firmly higher than the 28,000 total recorded in July when Tesla’s Shanghai gigafactory was idled for scheduled maintenance, but essentially only match the 78,000 tally from June.
That could suggest growth rates will be challenging in the world’s biggest car market as the economy slows and buyers trim spending. China’s central bank has tweaked rules on foreign exchange holdings to entice lending, while Beijing is plotting several spending packages to support the broader economy through its ‘zero Covid’ policy over the back half of the year.
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Earlier this week, rival China-based EV maker Nio Inc. (NIO) – Get NIO Inc. American depositary shares each representing one Class A 蔚来汽车 Report reported a wider-than-expected second quarter loss of $337.3 million, with narrowing profit margins, and guided investors to a tepid near-term outlook amid what CFO Steven Wei Feng called “tremendous challenges and cost volatilities” in the China market.
Broader China exports in August were markedly slower than July, as well, with official trade data Monday showing Covid lockdowns hammered manufacturing and services activity up and down the country.
Exports were only 9.4% higher than last year, official data indicated, narrowing China’s trade surplus to a much smaller-than-expected $79.4 billion.
Tesla shares were marked 0.1% lower in pre-market trading to indicate an opening bell price of $283.46 each.
Tesla posted stronger-than-expected second quarter earnings in late July and reiterated its goal for full-year delivery growth despite input price pressures and narrowing profit margins.
Tesla said adjusted earnings for the three months ending in June rose 56.5% from last year to a Street-beating, $2.27 per share, although revenues were modestly light at $16.94 billion.
Gross automotive margins were 27.9%, Tesla said, a 500 basis point decline from last year, Tesla said, just inside the Street forecast of 28.2%, owing to put a surge in input costs and expenses linked to the ramp-up of new factories in Austin and Berlin.
The group also said it expects full year deliveries to grow 50% from 2021 levels, implying a target of 1.4 million vehicles that Tesla CFO Zachary Kirkhorn said has become “more difficult but remains possible with strong execution.”