Tesla consumers in China will not have to wait as long to receive their electric vehicles, with wait times now as low as one week for all models.
Tesla also reportedly is offering an insurance subsidy to spur sales before the end of the quarter, a de facto price cut that may presage lower sticker prices ahead.
This comes amid substantially increased Tesla Shanghai production as well as new competition from BYD and Nio.
Tesla Vehicle Wait Times Fall
Wait times for Tesla models in China all now starting at one week, according to a review by CnEVPost of Tesla's China websites. Customers have had to wait less and less to receive vehicles since Tesla increased capacity at its Shanghai facility.
Covid-19 restrictions and lockdowns hit the EV sector hard, especially in the spring. Tesla Shanghai was shut down for several weeks from the tail end of March to late April, with production not returning to normal until early June.
Tesla also slowed output in July and early August for upgrades that have substantially increased production capacity.
But any backlog of unmet demand appears gone.
Tesla stock fell 0.13% to 303.35 in Friday's market trading, with the major indexes down solidly. TSLA stock is holding above its 200-day line, flirting with aggressive entries.
Production Booms, Can Demand Keep Up?
Riding the recent capacity increases to its Shanghai facility, Tesla deliveries in China shot up in August, approaching record highs set in June.
The electric-vehicle giant delivered around 77,000 autos in China during August, according to the China Passenger Car Association. More than 42,000 of those were exports, meaning Tesla deliveries totaled 34,502 vehicles to consumers in China last month.
Tesla usually focuses on producing vehicles for export in the first half of a quarter and then shifts toward domestic markets in the second half.
With Shanghai production likely hitting a record this month, Tesla local sales should boom. But with a backlog gone, can ongoing Tesla demand rise to match over time.
Also, as the Tesla Berlin plant slowly picks up in speed, then Shanghai may export fewer Model Y vehicles to Europe.
On Sept. 16 there were local news reports in China that Tesla is offering an incentive on Model 3 and Model Y vehicles before the end of quarter.
Tesla owners who receive vehicles between Sept. 16 and Sept. 30, will receive an RMB 8,000 ($1,140) subsidy if they choose to purchase insurance in a Tesla store, according to CnEVPost.
That could be presage actual price cuts down the road. Tesla and many other EV makers have raised prices substantially over the past year. They've cited higher battery and raw material costs. But it's also true that with EV and overall auto production so constrained, EV makers were able to push up prices.
That may no longer be the case.
Tesla Faces New Competition
While Elon Musk has ramped up Model 3 and Model Y production in China, they are no longer fresh EVs, especially the Model 3.
Aging vehicles from other EV makers have seen demand fall substantially.
Meanwhile, the Model 3 is facing new competition in China.
BYD, the world's largest maker of EV and plug-in hybrids and China's largest seller of pure electrics, is taking on Tesla directly for the first time.
The Seal sedan has roughly equal dimensions and range to a Model 3 — but is $10,000 cheaper. BYD kicked off deliveries in late August, with 1,726 for the month, but are expected to surge in the coming months.
Luxury EV startup Nio is also looking to challenge Tesla market share with its ET5 sedan, priced just above the Model 3. ET5 deliveries begin on Sept. 30.
Is Nio Stock A Buy As Models, Markets Ramp Up?
Nio and BYD are both expanding their European operations, with deliveries set to start in many more countries in the fourth quarter. BYD is entering a slew of Asian markets, with the Seal likely to enter many of those countries in 2023.
BYD also is expected to unveil the Sea Lion crossover SUV in the next few months, which will take on the Model Y.
Nio stock dropped 6.6% to 20.09. Shares are hitting resistance at the 200-day line within a bottoming base. A decisive move above the 200-day would offer a buying opportunity.
BYD stock edged up 0.33% to 27.18. Shares have tumbled to four-month lows in the wake of Warren Buffett's Berkshire Hathaway selling a small slice of its big, long-term holdings.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
