Tesla announced better-than-expected first quarter results on Friday, with deliveries from its China operations playing a significant part in the mind-blowing figures.
The California-based company said it delivered 184,800 vehicles worldwide in the first three months of this year, beating Wall Street’s 172,230 forecasts. Sales of Tesla’s Model 3 and Model Y hit 182,780, trouncing market sales expectations of 160,230 deliveries. Chip shortages were behind the near absence of the Model S sedan and the Model X SUV, with none of the two cars being manufactured in the quarter and only 2,020 sold in total.
“We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity,” Tesla said in a statement. Though the company doesn’t break up sales by geography, China and the US remain its largest markets.
Tesla recently refreshed its Model S and Model X, with the new equipment just installed and tested. The company said that the new Model S and Model X have been “exceptionally well received”, adding that they are still “in the early stages of ramping production”.
Elon Musk, chief executive officer of the world’s leading electric vehicle (EV) maker, tweeted on Monday a “Special mention of Tesla China”.
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Citing “eye-popping” delivery numbers coming out of the country, Wedbush analyst Daniel Ives projected that the Chinese market could represent about 40% of the total for Tesla by 2022.
“We now believe Tesla could exceed 850,000 deliveries for the year with 900,000 a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector,” Ives wrote in a research note on Friday.
In the first quarter, Tesla produced 180,338 cars. Cowen analyst Jeffrey Osborne wrote in an April 4 report that temporary shutdowns of the company’s Fremont factory would make its Giga Shanghai facility account for a bigger share of volume in the quarter, which could potentially support profitability.
Tesla is pushing hard in China, the world’s largest automotive market, amid stiff competition from domestic EV start-ups. Chinese Premier Li Keqiang, who personally met Musk in 2019, said in a statement in March that the government would help add more charging stations and battery-swapping facilities for EVs across the country. These new measures are expected to add momentum to the national EV sector.
Tesla’s shares jumped 4.4% to close at $691.05 on Monday after climbing 7% in pre-market trade, while Chinese EV makers saw their stocks drop. Nio stock fell 0.9%, XPeng dipped 2.5%, and Li Auto went down 1.2%.
Tesla also said its delivery count should be viewed as slightly conservative and final numbers could vary by up to 0.5% or more.