Analysis Report on the Electric Vehicle Market in China
According to a report by analyst Gianarikas from Canaccord Genuity, despite persistent negativity surrounding electric vehicles (EVs), both EVs and hybrid vehicles are rapidly capturing the traditional car market, especially in China.
This shift is significantly transforming China's automotive landscape. Statistics indicate that by 2024, the EV market share in China is projected to reach nearly 50%, a significant increase from 6% in 2020. This growth demonstrates the rapid development of the Chinese market in the EV sector.
Furthermore, by 2024, the market share of Chinese domestic brands is predicted to surge from 43% in 2020 to 62%. Conversely, global brands, particularly those from the United States, Germany, and France, face pressure from a shrinking market share. General Motors (GM) exemplifies this trend. Their sales in China have decreased from 290,000 vehicles in 2020 to 180,000 in 2024. This trend highlights the continued contraction of the traditional internal combustion engine (ICE) vehicle market in China.
Despite these challenges, Tesla, a Western company, maintains a leading position in the competitive Chinese car market thanks to its robust EV product line.
Over the past few years, Chinese domestic brands have seized the opportunity presented by the electrification transformation and have rapidly gained global prominence. In 2024, 18 out of the top 20 best-selling electric vehicles globally are from Chinese brands. Global automakers, especially traditional manufacturers in Europe and the United States, have fallen behind due to their prolonged focus on fuel-based vehicle sales. Traditional brands such as General Motors, Ford, and Volkswagen are gradually losing competitiveness due to insufficient preparation for the EV market.
Canaccord Genuity's report emphasizes Tesla's resilience in the fiercely competitive Chinese market, predicting it will be a highlight in the third quarter of 2024. The report anticipates a continuous rebound for both EV and hybrid vehicles in the future, from which Tesla stands to benefit.
Disclaimer: The analysis provided above is for reference only and does not constitute investment advice.
Tesla Production and Operation Updates
Sales News
Tesla recently announced the discontinuation of its entry-level Model 3 Rear Wheel Drive (RWD) in the U.S. market. The Long Range RWD, boasting a range of 363 miles, will become the new base model, priced at $34,990, including tax credit subsidies.
Two primary factors influenced this change. First, the Biden administration recently raised tariffs on EVs imported from China from 25% to 100% and increased tariffs on lithium-ion batteries and their components from 7.5% to 25%. Second, while the Model 3 RWD is produced in California, it utilizes Lithium Iron Phosphate (LFP) batteries sourced from China. Consequently, it doesn't qualify for the $7,500 tax credit, unlike the Model 3 Long Range RWD, making the latter more appealing to consumers. These factors prompted Tesla to halt the production of the base Model 3 RWD. Consequently, Tesla no longer utilizes Chinese-made LFP batteries in its U.S. models. This strategic move helps Tesla navigate the new U.S. trade policies and maintain its competitiveness in the EV market.
Additionally, starting October 1, 2024, Canada will impose a 100% tariff on EVs manufactured in China, simultaneously discontinuing the federal government's $5,000 EV purchase subsidy. This measure, following similar actions by the United States and Europe, aims to reduce reliance on Chinese imports and stimulate domestic production.
However, concerns arise regarding potential price adjustments by Tesla, as the company currently imports Model 3 and Model Y vehicles from its Shanghai Gigafactory to Canada. While many anticipate Tesla to raise prices and issue advance warnings, similar to their response to tariff increases in Europe earlier this year, the prices for Model 3 and Model Y remain unchanged on Tesla's Canadian website.
The Canadian Ministry of Transportation's website now indicates that imported Model 3 and Model Y will no longer be eligible for federal purchase subsidies from October 1, 2024. However, Tesla's website still lists the Model 3 RWD, Long Range, and all three Model Y variants as eligible for the $5,000 subsidy. This suggests Tesla may have altered its logistics, shifting from Shanghai imports to relying on U.S. production for the Canadian market.
It appears Tesla might be supplying Canada from its Fremont factory and potentially even its Texas Gigafactory for the first time. This strategy aims to circumvent Canadian tariffs, avoid passing on additional costs to consumers, and maintain price competitiveness.
Moving forward, close attention will be paid to Tesla's pricing strategies, providing updates on any changes.
European Market Updates
Despite facing nearly a year of labor disputes, Tesla maintains strong market performance in Sweden. In the first nine months of 2024, Tesla sold 16,478 cars in Sweden, representing a 1% growth and increasing its market share to 8.5%, up from 7.8% in the same period last year.
This growth demonstrates Tesla's sustained competitiveness in the European market, particularly in Northern Europe. The Nordic region shows a clear trend toward electrification. In Norway, 96.4% of new vehicles registered in September were pure electric vehicles, significantly higher than the 90% recorded in the same period last year. Norway has become a global benchmark for promoting EV adoption. As EVs overtake traditional fuel-based vehicles, the Norwegian car market is rapidly transitioning towards complete electrification.
Software Updates
Starting December 1, 2024, Tesla's Premium Connectivity subscription will no longer include LiveOne's Slacker Radio. Users who wish to continue enjoying LiveOne's streaming music service in their Tesla vehicles will need a separate subscription. However, owners with Tesla's lifetime free Premium Connectivity will retain free access to LiveOne's services.
Similar changes will affect Spotify's services. From December 1, 2024, Spotify's Premium car account will no longer be included in Tesla's Premium Connectivity subscription. Owners will need to log in using their Spotify accounts and update their account information on the in-car screen. These adjustments reflect Tesla's strategic shifts in music streaming services. Owners will need to choose different service providers or pay additional subscription fees to continue using these features.
Advertisement Updates
Tesla's activity on the X platform increased significantly in September. The company posted 482 times across its 19 different official accounts, generating over 200 million impressions. This indicates Tesla's increasing engagement on social media. This data highlights Tesla's high interactivity on social media platforms, significantly enhancing its brand's social exposure.
Semi Truck Updates
Tesla's AI team recently hinted on the X platform about potentially launching Full Self-Driving (FSD) for its Semi trucks at the upcoming October 10th launch event. Based on their responses, Tesla may have more surprises in store. If FSD is implemented in Semi trucks, it will mark a significant step for Tesla in commercializing its fully autonomous driving technology and will profoundly impact the logistics and transportation industries. We eagerly anticipate the October 10th launch event and the surprises it may hold.
Energy Updates
Recent data reveals that Tesla has installed 750,000 Powerwall energy storage systems globally. With the launch of the Powerwall 3 earlier this year, Tesla's production capacity increased, propelling installations to new heights. Estimates suggest that Tesla has installed over 630 Powerwall units daily on average in the first nine months of this year. To date, Tesla's Powerwall sales are projected to have generated approximately $14 billion in revenue. As the demand for energy storage grows, Tesla's Powerwall products exhibit robust performance in the global market and have become a significant growth engine for Tesla's energy division.