Al Root
Tesla is getting passed in the fast lane by China's BYD. Elon Musk may want to do something about that.
On Thursday, retail car sales data became available for November from the Chinese Passenger Car Sales Association. Almost 600,000 new energy vehicles were sold in China this past month, up about 58% year over year.
New energy vehicle sales in China include battery-electric vehicles and plug-in hybrids. Roughly 400,000-plus of the NEV sales in November were all battery-electric models -- the kind Tesla (ticker: TSLA) makes.
Tesla produced a record 100,291 cars from its Shanghai plant in November. About 62,493 were sold domestically with the rest exported to Europe.
Meanwhile, BYD (1211.Hong Kong) sold about 114,000 battery-electric vehicles in November.
Year to date, Tesla's Chinese battery-electric share is stable, at about 11%, up one percentage point from the same span in 2021. That is a solid performance from Tesla, but BYD's comparable market share year to date is 23%, almost double from the 12% share earned over the same span of 2021.
BYD did it by expanding production of lower price EVs. The average price of all BYD vehicles, including buses, has averaged roughly $35,000 in 2022, down from $49,000 in 2021.
The same calculation for Tesla generates sales per vehicle of about $63,000 in 2021, up from $58,000 over the same span in 2021.
The movement in market share generated by the lower price vehicles is "the strongest argument yet why [Tesla] needs a standalone [$30,000] EV ASAP in China," said Future Fund Active ETF $(FFND)$ co-founder Gary Black on Twitter Thursday. Black's fund holds Tesla stock.
A lower-priced vehicle will help expand Tesla's addressable market.
Musk says that a lower-price car is a priority for his company, but Tesla also is working on Cybertruck and a self-driving robotaxi. He might want to bump the cheaper Tesla to the top of the development list.
It could be a needed catalyst for shares. Tesla stock is down about 52% year to date, battered by a combination of rising interest rates, inflation, competition, and Musk's own distraction with his Twitter purchase.
Tesla shares were down about 2% at $170.50 in midday trading on Thursday. The S&P 500 and Dow Jones Industrial Average were both up about 0.7%.
It is the fourth consecutive daily loss for Tesla stock. Shares are off about 12% over that span.
Write to Al Root at allen.root@dowjones.com
(END) Dow Jones Newswires
December 08, 2022 13:23 ET (18:23 GMT)
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