Tesla reached an important milestone in the world’s largest electric vehicle market as it began deliveries for its first Shanghai-made Model Y crossovers in China.
Tesla (NASDAQ: TSLA) has broken new ground according to reports that have emerged this week, which state that the company has begun rolling out the locally-made Model Y crossover vehicles in China. However, it’s not clear how many vehicles were delivered this week or whether the cars were sold to employees or retail customers.
The announcement was made from Tesla’s Twitter account on Monday alongside images of the SUV from the company’s showroom. Tesla confirmed in the post that deliveries of the Model Y had begun in Shanghai, Hangzhou, and Wuhan.
Tesla has already received enough orders for the Model Y to exhaust supplies for the first three months of 2021. The Model Y costs 339,900 yuan ($52,400) for the ‘long-range’ version, and 369,900 yuan ($57,000) for the “performance” edition.
Tesla’s Model 3 was the first vehicle to be manufactured and sold in China, produced at the company’s massive Gigafactory in Shanghai.
Tesla bets big on China
In 2019, Tesla investors were impressed after the company beat its own deadline to start building vehicles in China, just 10 months after it broke ground on the plant. That example boosted shareholders’ confidence as Tesla proved it could keep up with delivery targets as it grew. China was also a driving force behind Tesla’s impressive delivery volume in 2020 — when the company delivered 499,550 vehicles, up 36% year-over-year (YoY).
China has become a vital element of Tesla’s expansion story and global strategy, with CEO Elon Musk dubbing the country’s market as a “template for future growth.” Now, Musk plans to increase vehicle sales volume from 500,000 in 2020 to 20 million annually over the next decade and China will be a vital component to this goal.
Analysts believe that more than 40% of Tesla’s delivery sales could potentially come from the country. Currently, China is Tesla’s main region for growth, closely followed by Europe and then the U.S.
Recently, Tesla has leaned heavily on its Chinese operations, including the company’s decision last October to start exporting Chinese-made vehicles to Europe. Tesla is also planning further investments in Asia, along with a launch in India later this year.
The eagerly awaited Model Y debut is also seen as another challenge to home-grown rival NIO. The Chinese-owned EV manufacturer launched its ET7 sedan just over a week ago and also sells a line of electric SUVs. The huge sales figures prove that there definitely is a market for Tesla’s in the country even if the Chinese government favors home-grown manufacturers.
Tesla’s global dominance
Tesla’s loyal legion of followers will be thrilled with this launch as the company’s bull thesis is said to be centered around the company’s expansion into China. It’s obvious that Tesla is now becoming the dominant EV maker across the world and isn’t slowing down anytime soon.
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