Tesla saw May sales in China slightly increase amid rumors it is developing an upgraded Model 3 vehicle at its Shanghai plant. Meanwhile, the global EV giant announced Friday its base Model 3 in the U.S. is now eligible for the full Inflation Reduction Act tax credit. TSLA stock advanced Monday.
Tesla sold 77,695 China-made vehicles in May, including exports, according to data released Monday by the China Passenger Car Association. That's up 2.4% from April and a 141% gain vs. the 32,165 vehicles last May during Covid restrictions and closures. It is currently unclear how many China-made vehicles were exports.
In April, 39,956 China-made Tesla vehicles were delivered in China while 35,886 were exported. The U.S.-based company usually has focused on exports in the first half of the quarter before shifting to local deliveries in the second half. So far this year, Tesla has sold 382,859 China-made vehicles, up 77% from the 215,851 between January and May in 2022.
This comes amid reports that Tesla was pausing operations at its Shanghai plant earlier in the year to retool the facility for new Model 3 production lines. Tesla Shanghai has allegedly slashed Model 3 production recently, according to various reports, with speculation it is in preparation for the revamped Model 3. The U.S. company has not confirmed reports it has been working on a new Model 3 sedan.
Tesla Stock
TSLA jumped 1.7% to 217.61 Monday during market trading. TSLA has gained more than 100% since it hit lows of 101.81 in early January.
Tesla stock surged 10.8% to 213.97 last week, including a 3.1% jump on Friday. TSLA cleared the 200-day moving average on Tuesday. On Friday, TSLA stock ran past an official 207.79 buy point from what's either a cup or a double-bottom base. The EV giant has advanced on above-average volume for five straight sessions.
Tesla stock fourth in IBD's automaker industry group. TSLA has a 82 Composite Rating out of 99. Tesla stock has a 69 Relative Strength Rating. The EPS Rating for Tesla stock is 93 out of 99.
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Full Tax Credit For Model 3
In the U.S., Tesla now says its base Model 3 is eligible for the full $7,500 tax credit under the Inflation Reduction Act (IRA). All of Tesla's Model 3 and Model Y vehicles are now eligible for the full tax credit, according to Tesla.
The Biden administration announced on March 31 that vehicles eligible for the full $7,500 tax credit must have batteries with specific amounts of components from North America and critical minerals sourced in the U.S. or from certain countries.
Vehicles that meet one of the critical minerals or battery components requirements will be eligible for a $3,750 tax credit. At the time, the base rear-wheel drive Model 3, with its battery from China, did not qualify for the full tax credit.
Meanwhile, the global EV giant once again whittled away its prices on U.S. inventory vehicles to entice consumers this week. The global EV company is offering discounts of up to around $2,680 on rear-wheel-drive Model 3 new inventory vehicles in the U.S. The new deal is double the $1,300 discount Tesla began offering almost two weeks ago.
The company has recently tried to work through its supply of unsold vehicles, offering deals on its U.S. Model 3 lineup. Calling the moves "inventory discounts," Tesla contends they are not official price cuts. However, the moves point to surplus in unsold vehicles, and the effect on profit margins is the same.
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