Tesla vehicle insurance registrations in China continue to pick up, putting the company on pace to reach best-ever quarterly deliveries in the competitive EV market as it targets record full-year targets. TSLA stock gained ground Tuesday.
Tesla insurance registrations in China totaled 17,600 last week, up 5.4% from 16,700 the prior week, according to data reported by CnEVPost. These numbers represent the fifth full week since Tesla began delivering its revamped Model 3 in China. Currently the numbers are not broken down to show Model 3 vs. Model Y registrations.
Tesla is looking to meet its goal of delivering 1.8 million vehicles in 2023. So far in Q4 Tesla China insurance registrations, a rough gauge for vehicle deliveries, total 104,500 for the quarter, up more than 3% compared to the same point in Q3. The number of China registrations through Q4 is also 10% higher than the same point in Q2 when Tesla delivered a record 156,676 vehicles in China.
Tesla sold 82,432 China-made vehicles in November, up 14.3% from 72,115 in October, breaking two straight months of sequential declines in sales, according to data released by the China Passenger Car Association (CPCA) Monday. However, Tesla's November sales total fell 17.8% from 100,291 in Nov. 2022. The data released by the CPCA Monday include exports.
Meanwhile, Tesla on Monday also confirmed that the full $7,500 Inflation Reduction Act (IRA) tax credit will go away for two Model 3 trims in the U.S. The tax credit will be reduced to $3,750 for the rear-wheel drive Model 3 and the Model 3 long range trims on Jan. 1, 2024, according to Tesla's website.
Tesla stock advanced 1.3% to 238.72 Tuesday during market action. On Monday, TSLA fell 1.4% to 235.58. Last week, Tesla stock rose 1.4% to 238.83. Before Tuesday trade, TSLA shares had booked four consecutive losses on its Cybertruck delivery event.
Tesla Stock: China Price War
TSLA has recently been ramping up the EV price war once more in China. The U.S.-based EV company has raised prices on Model Y trims in China for five-straight weeks, dating back to the end of the third quarter.
However, as Tesla continues to raise vehicle prices in China, the company has started offering a $1,127 insurance subsidy for base-trim Model 3 and Model Y vehicles in inventory through year-end, local media reported. The entry-level trims account for the vast majority of Tesla's China sales.
Tesla also is offering low-rate loans to spur demand. Top competitor BYD recently stepped up discounts on a range of models, as the China EV and battery giant aims to hit a sales target of 3 million EVs in 2023.
Other China EV makers are rolling out new models at highly competitive prices.
Tesla Hopes New Offerings Bolster Deliveries
Before Tesla delivered 12 Cybertrucks Thursday, the EV company unveiled its new Model 3 in China on Sept. 1 with official sales beginning on Oct. 19. Tesla started delivering the "Highland" Model 3 on Oct. 26 in China, with European deliveries also underway. The global EV giant also launched a slightly updated Model Y in China earlier in October.
Through the end of Q3, Tesla delivered about 1.324 million vehicles globally for the year, meaning the company needs to deliver roughly 476,000 in Q4 to reach 1.8 million. That's 2% more than its record 466,140 deliveries in the second quarter and a rebound from Q3's 435,059. Tesla reiterated its 1.8 million vehicle delivery goal in its third-quarter earnings.
However, since Oct. 18, analyst projections have dropped. Wall Street consensus has Tesla vehicle deliveries in 2023 totaling 1.797 million, just below that 1.8 million target, according to FactSet. Meanwhile, Wall Street is currently expecting 473,000 deliveries in Q4.
Tesla Stock Performance
The stock has formed a double-bottom base with a 278.98 buy point, according to MarketSmith analysis. Tesla stock is about 15% below its official buy point and testing support at its 50-day moving average.
Since the beginning of 2023, Tesla stock has surged around 90%, easily outperforming the broader S&P 500 index.
Tesla stock ranks sixth in the 35-stock IBD automaker industry group. The S&P 500 component has an 82 Composite Rating out of a best-possible 99. Tesla stock also has an 82 Relative Strength Rating and an 88 EPS Rating.
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