Tesla in Troubled Waters: Elon Musk’s EV company is struggling to sell its cars in China

Elon Musk’s Tesla is facing some really tough times in China and is struggling, to sell its EVs. However, Tesla’s competitors are making some great money as Chinese auto customers are betting hard on EVs. Li Auto, a prominent electric vehicle (EV) manufacturer in China, has achieved a record-breaking streak of monthly sales for the sixth consecutive time this year. This success is largely attributed to robust demand in the world’s largest EV market, driven by the introduction of new models and the growing availability of charging stations. In September, the Beijing-headquartered premium EV maker delivered 36,060 vehicles, marking a 3.3 per cent increase from the previous month and an impressive 212.7 per cent year-on-year growth. During the third quarter, Li Auto shipped 105,108 vehicles, showing a remarkable 296.3 per cent increase compared to the same period in the previous year. In the first nine months of the year, the company delivered 244,225 vehicles. Notably, each model from Li Auto’s Li L series achieved monthly deliveries exceeding 10,000 vehicles for the second consecutive month. The resurgence of Chinese customers in the EV market is partially due to the end of a price war initiated by Tesla last year, which concluded in May. Many consumers have turned to EV manufacturers like Li Auto and Shenzhen-based BYD, which, while not a direct competitor to Tesla, overtook it as the world’s largest EV assembler last year. Other notable Chinese EV manufacturers, including Nio, Xpeng, and BYD, are often considered China’s premium segment counterparts to Tesla. Xpeng, for example, delivered 15,310 smart EVs in September, a 12 per cent increase from August and an 81 per cent rise from the previous year. While its new SUV, the Xpeng G6, experienced a 41 per cent drop in sales in September, its total smart EV deliveries for the third quarter reached 40,008 units, representing a 72 per cent increase from the second quarter. Li Auto’s success can be attributed, in part, to an over-the-air software update for the Li L series in September, along with the completion of over 100 supercharging stations along highways throughout China. Xiang Li, the chairman and CEO of Li Auto, expressed the company’s achievements in September, stating, “Driven by the ever-increasing market demand, we made numerous historic breakthroughs in September.” Nio delivered 15,641 vehicles in September, reflecting a 43.8 per cent year-on-year increase but a 19 per cent decline from the 19,329 EVs delivered in August. For the third quarter, Nio sold 55,432 vehicles, marking a year-on-year growth of 75.4 per cent. Over the first nine months of the year, the company delivered 399,549 vehicles. Tesla, another key player in the Chinese EV market, is expected to release its September figures later this month. In August, Tesla delivered 64,694 vehicles from its gigafactory in Shanghai, indicating an 87.5 per cent year-on-year increase and a 105.9 per cent growth from July, according to the China Passenger Car Association. Chen Jinzhu, the CEO of consultancy Shanghai Mingliang Auto Service, predicts continued growth in the Chinese EV market through the end of 2023. This growth is attributed to an expanding charging network and the launch of new models with intelligent features. Chen noted that the three top Chinese EV startups are well-positioned to benefit from the country’s accelerated electrification on the roads.