- Chinese electric vehicle makers hit record sales in June, challenging Tesla’s dominance.
- BYD, Nio and Zeekr posted significant year-over-year growth despite concerns over US and EU tariffs.
- Tesla faces pressure from declining sales, but could rebound with growth in China and unveiling of Robotaxi.
Three Chinese electric vehicle makers hit record sales figures at the end of June, which could spell trouble for Tesla.
BYD, China’s largest electric vehicle maker, sold nearly 1 million electric and hybrid vehicles in the second quarter of the year, according to Bloomberg calculations. During the same period, Nio said it delivered more than 57,000 vehicles, a 144% increase from a year earlier.
Zeekr, owned by Geely Automotive and listed in the US in May, posted a record June with more than 20,000 deliveries, an 89% increase from a year earlier.
Despite concerns about US and European Union tariffs, sales of all three producers have been boosted by price cuts, the introduction of cheaper models and Chinese demand for electric vehicles in Russia, where Western competitors have exited.
The numbers could make Tesla and its CEO, once dismissive of Chinese companies, nervous. The U.S. electric-vehicle giant reports second-quarter deliveries on Tuesday. The first-quarter numbers showed Tesla was hurt by falling demand for electric vehicles.
Analysts expect Tesla’s total deliveries to fall 6% from April to June, Reuters reported ahead of official figures.
Tesla has taken big steps to re-attract customers and reassure investors this year.
At the end of the first quarter, CEO Elon Musk entered the electric vehicle price war by slashing prices on some Tesla models. During the company’s first-quarter earnings call, Tesla also announced a much-anticipated cheaper electric vehicle. In late May, Tesla even offered Chinese customers a chance to tour its Fremont, California, factory if they purchased a car this summer.
“Tesla’s fundamentals are in a tough spot right now and we generally expect negative revisions,” Barclays analyst Dan Levy told CNBC last month. One of the company’s biggest challenges is stagnant volume growth, he said.
Levy predicted an 11% drop in shipments in the June quarter, below analysts’ estimates.
The Bullish Case for Tesla
Despite the strength of Chinese electric vehicle companies, one analyst is confident Tesla is poised for a rebound thanks to growth in China and the unveiling of the Robotaxi, scheduled for August.
“We have seen some signs of Tesla pricing stabilization over the past few months, as it appears the lion’s share of price declines are now in the rearview mirror,” Wedbush analyst Dan Ives wrote in a note Friday.
Ives, a Tesla fan, said demand in the key China region is showing signs of improving as customers realize there will be no more price cuts.
Moreover, analysts have long argued that the real value of some U.S. electric vehicle companies lies not in the cars themselves, but rather in the technology that could be sold to other customers.
“We continue to believe that Tesla is more of an AI and robotics company than a traditional automaker,” Ives wrote Friday.
The same goes for its American competitor Rivian, which recently announced a $5 billion investment from Volkswagen.
Software is one of Rivian’s strengths, Goldman Sachs analysts noted in January — “a key part of Rivian’s value proposition and monetization opportunity.”
