Tesla’s China Output Surges by 17% Amid Rival Slump: A Boost from Government Subsidies

Tesla's production of electric vehicles from its China factory has seen a 17% increase, even as competitors like Li Auto and Nio experience a decline in sales. The US car manufacturer has managed to defy the overall downward trend in the first half of the year, largely due to increased government subsidies enhancing sales.

The American automobile manufacturer's Gigafactory 3, located in Shanghai, supplied 86,697 Model 3 and Model Y cars to local and international customers in August. This represents a 17% increase from July and a 3% rise compared to the same month last year, as reported by the China Passenger Car Association (CPCA).

Even with the recovery, the factory's shipments in the initial eight months of 2024 were 6 per cent less than the 624,983 vehicles it dispatched during the corresponding timeframe the previous year.

"Tesla and its domestic competitors have gained advantage from the financial incentives provided by the Chinese government to promote the buying of electric vehicles as replacements," stated Tian Maowei, who heads sales at Yiyou Auto Service in Shanghai. "Given that a growing number of younger drivers are favoring electric cars over those that run on gasoline, Tesla's market performance in China is likely to stay consistent in the near future."

Towards the end of July, Beijing increased the subsidies for electric vehicle purchasers by two-fold. This move came only three months after they introduced incentives to speed up the shift of the local car industry.