Tesla’s China Sales Rise 9.3% in August. The Price Cuts Are Working.

Apple's iPhone sales in China have surpassed those in the United States for the first time, contributing to Apple potentially becoming the biggest player in the smartphone market this year, despite global smartphone shipments being on track to be the worst in a decade due to economic headwinds in China and the US, according to Counterpoint Research.

Chipmaker Nvidia has taken over Tesla's role as a market driver, while Chinese markets and the yuan see gains.

Huge price reductions and increased availability are driving growth in the electric vehicle market, which saw record sales in 2023, as major manufacturers like Tesla, Ford, and General Motors lower their prices and pass on cost savings from raw materials to consumers.

Chinese EV company BYD and Tesla are reporting strong earnings and are emerging as leaders in the electric vehicle industry.

Shares of Chinese automaker BYD listed in China surged over 5% following a significant jump in first-half profit, driven by record deliveries and growth in the new energy vehicle business, with revenue increasing by 72.72% compared to the same period last year.

Tesla is predicted to reach a value of $1.00 by the end of the year, and despite mixed opinions on its quality, it is seen as a dominant force in the automotive industry similar to other successful tech companies like Apple, Nvidia, Google, Amazon, and Microsoft.

Tesla's stock is surging and flirting with a buy point due to positive buzz around the company's upgraded Model 3 and upcoming Cybertruck, as well as the increase in Tesla insurance registrations in China.

Consumer spending in China rebounded in August, with all categories, including apparel, automotive, food, furniture, appliances, and luxury, experiencing increased sales compared to July, according to a survey by the China Beige Book. Retail sales in July rose by 2.5% year-on-year, raising concerns about China's economic growth, but the August survey showed a surge in spending, particularly in the services sector, which saw continued strength in travel and hospitality. Additionally, corporate borrowing increased as the cost of capital declined, indicating a boost in business activity. However, China's property sector continued to worsen, with house prices barely growing and home sales declining.

Tesla has unveiled its updated Model 3 EV sedan in China, featuring a sportier exterior, improved battery range, and faster acceleration, although surprising many with a 12% price increase; the upgraded model is expected to boost sales and profit margins for the electric vehicle giant.

Tesla's rivals in China, including Li Auto, BYD, XPeng, and Nio, reported strong August deliveries, with Li Auto achieving a record sales month and Nio deliveries coming close to a record, while the overall China EV market is expected to see growth despite the country's weakening economy.

China has announced new guidelines to boost car sales, with a focus on new energy vehicles, aiming to sell around 27 million new vehicles this year and increase sales of electric cars to approximately 9 million units, as the country looks to revive its post-Covid economy.

The stock of Tesla dropped over 5% due to the launch of new hardware, but software may have been a bigger factor.

Chinese car makers BYD and XPeng saw their stock prices rise ahead of a major auto show where they will compete with Tesla, which is making its first appearance at the event in Munich.

China's share of the European electric car market has more than doubled in less than two years, with the UK being the largest market for Chinese electric car brands, as new battery electric technology and lower prices have boosted sales and wiped away concerns about lower-quality cars, posing an "imminent risk" to the European industry, according to industry experts.

Tesla's production at its manufacturing plant in Shanghai increased in August to meet Wall Street's output targets.

China's passenger vehicle sales experienced growth in August, driven by discounts and tax breaks on environmentally friendly and electric cars, despite a weak economy, and Tesla's share of the Chinese electric vehicle market nearly doubled.

New home sales in Beijing have increased by 16.9% in the week of September 4-10, indicating that government efforts to revive the property sector are having an impact in the Chinese capital. However, the rebound in sales is not reflected across the rest of China, with sales falling 20% on average nationwide.

Tesla stock surged 10% after a Morgan Stanley analyst upgrade highlighted the potential of the company's artificial intelligence capabilities and software and services revenue.

China's consumer prices returned to positive territory in August, increasing by 0.1% from a year earlier, while producer prices fell for the 11th consecutive month; analysts expect consumer prices to recover and services inflation to pick up as energy prices stabilize and the output gap narrows.

Tesla is expected to benefit from European protectionist measures as regulators crack down on Chinese electric vehicle (EV) competition, causing stocks of Chinese EV companies like NIO and XPeng to plunge.

Tesla was the most shorted large-cap stock in the US for the third consecutive month in August, but saw a 10% rally after a bullish research note from Morgan Stanley.

China's diesel exports surged in August, nearly tripling compared to the same time last year, as refiners capitalize on strong refining margins and increased demand for gasoline and jet fuel, driven by a recovery in road traffic and domestic flight capacity.

Despite Tesla's record deliveries in the second quarter, the series of price cuts have impacted margins and Goldman Sachs analyst Mark Delaney expects Tesla to continue slashing prices in 2024 to support higher volumes, resulting in lower vehicle sales than previously anticipated in Q3 and reduced EPS estimates for 2023 and 2024.