Tesla Model 3 Registrations Grow 11x In China In February Despite Market Downturn
The outbreak of the coronavirus and the resultant shock on global economies has drastically reduced consumer spending as most folks shift their priorities towards dedicating resources for essentials and healthcare. Naturally, this leaves little incentive and currency to make luxury purchases such as an electric vehicle - a fact that nearly shattered China's market for the cars in February, when the coronavirus-related disruptions in the country were at their peak.
Well, today we've got fresh numbers out of China for February, and they paint a good picture for electric automotive and renewable energy storage products manufacturer Tesla Inc (NASDAQ:TSLA). The figures show that despite the market having dropped massively year-over-year since February last year, Tesla has still managed to come out on top in China.
Tesla Model 3 Leads The Pack In China For February Vehicle Registrations As Market Shrinks By 72%
The month of February and the coronavirus has resulted in mostly bad news for Tesla. Not only is the company expected to be unable to meet its vehicle delivery targets for 2020's first quarter and the full year, but its vehicle registrations in Germany and other European countries also dropped in February, despite the German market growing by 149% year-over-year in the month.
Now, in a pleasant surprise for Tesla's management, employees, investors and followers, data from China paints a brighter picture for the company. Data sourced from EV-sales.blogspot reveals that last month, Tesla's Model 3 was the strongest selling electric vehicle in the country as 2,284 new units were registered in China.
This 1,042% increase came at a time when total electric vehicle registrations in the East Asian country dropped by an equally staggering 72% year-over-year in China. The 2,284 Tesla Model 3 registrations make up for 15% of the total 14,693 registrations in the country last month, which dropped from the 52,805 electric vehicle registrations that took place in China in February 2019.
Updated data from Europe, however, paints a different picture as Model 3 registrations in the continent have dropped by 4.5% year-over-year to stand at 3,589 at the end of February 2020. In terms of ranking, the Model 3 is the sixth most popular electric vehicle in Europe as of February 2020, and its registrations make up 4% of the total electric vehicle registrations in the continent made this year.
|Model 3, Overall registrations||February 2020||February 2019||Total electric vehicle registrations in Feb 2020||Total electric vehicle registrations in Feb 2019||YoY change (Model 3)||YoY change (Total)|
With populations in lockdown, Tesla might have a tough March as analysts predict registration drops
As the Model 3's mid-quarter ramp proves successful (up from 1,517 registrations in January) it's looking as if Tesla might end up posting strong registrations results for the car next month. Yet, given the current lockdowns present in most countries, it's also possible. that the electric vehicle market in Europe behaves differently than what we expect to based on historic results.
Taking a look at the past, in February 2019, the European electric vehicle market was roughly half of its current size, and in March, Tesla grew vehicle registrations from 3,757 to 15,771 - marking for 319% growth in just one month. The company's closest competitor in March 2019 was the Renault Zoe, with 4,361 registrations.
While the fact that electric vehicle registrations in Europe grew in February might be comforting for some, given that lockdowns picked up the pace in March, no certain claims related to the electric vehicle market's conditions last month can be made for the time being. The only positive news regarding the entire coronavirus situation right now is a pickup of industrial activity in China which has stimulated demand for some products. Just when will this resumption carry to Europe and North America remains to be seen.
As we head to Tesla's official vehicle delivery report this month, Wall Street analysts have finally trimmed down their expectations from the company. Analysts from Morgan Stanley and Morningstar have expressed warranted pessimism for vehicle deliveries in 2020's first quarter, with Adam Jonas of Morgan Stanley expecting Tesla's deliveries to stand in at 88,000 vehicles.
To weather out the current storm fuelled by the shutdown of its Fremont, California Gigafactory, Tesla does have ample capital through the $2.3 billion in equity that it raised in February. As a whole, Wall Street analysts now believe that investors are considering how well demand picks up in the second quarter to determine Tesla's performance for the full year.
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