Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
Earlier this month, U.S. Electric-vehicle maker Tesla began expanding the production capacity of its Shanghai Giga factory so it could start producing its Model Y vehicles there; now it has permission to sell the Model Y in China, too.
Chinese regulators at the Ministry of Industry and Information Technology on Monday granted Tesla official permission to sell its made-in-China Model Y series of sport utility vehicles in the country.
The Model Y SUV will be the second Tesla model to come out of Tesla’s Shanghai factory, after its Model 3 sedan. The Shanghai factory is slated to roll out its first Model Y cars in early 2021.
The Shanghai Giga factory—Tesla’s first production facility located outside the U.S.—kicked off production in October 2019 and delivered its first made-in-China Tesla cars, the Model 3 series, to Chinese customers last December. Tesla has since exported some of its Shanghai-made Model 3 cars to Europe.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
Tesla didn’t immediately respond to Coins2Day’ s request for comment.
The regulatory approval was expected, but it gives Tesla the official go-ahead to sell a new vehicle to the world’s fast-growing electric vehicle market—a market where it already has a commanding lead over rivals.
In the first half of 2020, Tesla was the No. 1 EV-seller in China, which is also the world’s largest car market overall. Tesla’s share of China’s EV market was 21% during the first six months of 2020, compared with 6% a year earlier. Tesla picked up market share once it started selling its China-made vehicles in China in late 2019; the domestically produced vehicles were 13% cheaper for Chinese consumers than Teslas imported from the U.S.
In the first nine months of 2020, China accounted for 19% of Tesla’s revenue, compared with 12% for the same period of 2019.
Even with its dominant market share in the mainland, the California-based automaker faces growing competition from Chinese electric vehicle firms that are capitalizing on the Tesla hype.
Shanghai-based startup Nio reported record vehicle deliveries in the third quarter of 2020. Xpeng and Li Auto, which both debuted on U.S. Exchanges this summer, also reported strong third-quarter sales figures.
Tesla’s shares soared earlier this month after it joined the S&P 500 stock market index of large U.S.-listed companies, and the electric-vehicle maker also reported record deliveries in its third-quarter results.
Tesla’s vehicle production in the third quarter increased around 76% compared with the second quarter of 2020, thanks to the firm’s Shanghai factory, which helped offset a drop in production caused by the coronavirus-induced closure of Tesla’s California plant.
