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Tesla’s (NASDAQ:TSLA) vehicle registrations for November witnessed a nearly 14-fold increase in China relative to the comparable period last year as the company successfully evaded an industry-wide malaise currently affecting the Asian giant.
According to the data provided by the state-backed China Automotive Information Net (CAIN), 5,597 Tesla vehicles were registered in November, thereby, marking a 5-month high and a whopping 1,324 percent increase relative to the 393 Tesla cars that were registered in the same period last year.
These figures are even more notable due to a significant downturn that has gripped China’s electric car market for the past 5 months. Nonetheless, Tesla’s enduring success in the country now rests upon the fate of its third Gigafactory that is based in Shanghai and which is expected to become fully operational by January 2020. This facility is crucial for the iconic electric car manufacturer to lower manufacturing costs and spur the demand for its Model 3 offering.
As a refresher, sales figures of the Model 3 in China climbed earlier this year as the Xi Jinping-led government provided an exemption to the vehicle from a 10 percent purchase levy. Moreover, by localizing the production of Model 3, Tesla will be able to avoid a 15 percent tariff that has been imposed by the Asian giant on all cars imported from the U.S. Additionally, as per multiple reports from earlier this week, Tesla may lower the price of Model 3 in China by a further 20 percent in 2020 as it starts to incorporate local components. A significant proportion of these cost savings will arise from the company eschewing Panasonic battery packs in favor of those made by LG Chemicals in a nearby plant.
2019 has been a rollercoaster ride for the Elon Musk-led company in China as it grappled with the ups and downs of the U.S. – China trade war. Although the registration figures cited are not an exact proxy for the sales figures of the company, they are among the few tracking tools available in China as Tesla itself does not report the country’s monthly sales figures.
Readers should bear in mind that the threat of additional tariffs on U.S. car imports in China amid an escalating trade war may have played an important role in jacking up the registration figures for the month of November. The situation has, however, stabilized recently as the two countries announced a much-anticipated entente by concluding a phase one trade agreement.
As of 09:32 a.m. ET, the company’s share price is trading at an all-time high of $410.59. Bear in mind that Tesla’s stock has soared by 21.41 percent year-to-date (based on Thursday’s closing price) while the NASDAQ Composite has increased by 33.94 percent in the same period.