- Chinese electric car makers posted record sales in June, challenging Tesla’s dominance.
- BYD, Nio, and Zeekr saw strong year-over-year growth despite US and EU tariff concerns.
- Tesla is facing pressure from falling sales but could rebound thanks to growth in China and the unveiling of robotaxis.
Three Chinese electric car makers achieved record sales at the end of June, which could pose a problem for Tesla.
BYD, China’s largest electric-vehicle maker, sold nearly 1 million electric and hybrid vehicles in the second quarter of this year, according to Bloomberg calculations. NIO said it delivered more than 57,000 vehicles in the same period, up 144% from a year earlier.
Geely Automobile subsidiary GeeCar, which went public in the U.S. in May, delivered more than 20,000 vehicles in June, its highest-ever figure, up 89 percent from a year earlier.
Despite concerns about tariffs from the United States and the European Union, sales at all three companies have risen thanks to price cuts, the introduction of cheaper models and demand for Chinese-made EVs from Russia where Western rivals have retreated.
These figures may worry Tesla and its CEO, who has previously been dismissive of Chinese companies. The American EV giant reports second-quarter delivery figures on Tuesday. First-quarter figures showed Tesla was hit by a decline in EV demand.
Ahead of the official announcement, Reuters reported that analysts expect Tesla’s deliveries to fall 6% between April and June.
Tesla has made big moves this year to woo customers and reassure investors.
At the end of the first quarter, CEO Elon Musk entered the EV price wars by slashing the prices of some of Tesla’s models. The company’s first-quarter earnings call also saw the unveiling of a long-awaited, cheaper EV. In late May, Tesla even offered Chinese customers the chance to tour its Fremont, California, factory if they bought a car this summer.
“Tesla’s fundamentals are challenging right now and we expect a general downward revision,” Barclays analyst Dan Levy told CNBC last month. One of the company’s biggest challenges, he said, is sluggish sales volume.
Levy said deliveries for the June quarter were expected to fall 11 percent, below analyst expectations.
Tesla Bullish View
Despite the strength of Chinese EV companies, one analyst believes Tesla will bounce back thanks to growth in China and the planned unveiling of robotaxis in August.
“Tesla’s price has shown signs of stabilizing over the past few months, with the bulk of the price decline appearing to be over,” Wedbush analyst Dan Ives wrote in a note on Friday.
Ives, the Tesla bull, said customers realize prices aren’t going to drop any further and that demand in China, a key region, is showing signs of improving.
Moreover, analysts have long noted that the real value of some U.S. EV companies lies not in the cars themselves but in the technology they can sell to other customers.
“We continue to believe that Tesla is more of an AI and robotics company than a traditional car company,” Ives wrote on Friday.
So is American rival Rivian, which recently announced a $5 billion investment from Volkswagen.
Goldman Sachs analysts wrote in January that software is one of Rivian’s strengths and a “key part of Rivian’s value-add proposition and monetization opportunity.”
