Tesla May Be Losing Ground in One Key Country (Here's Who's Winning Out Now)

It's summertime and while the living may be easy for some, Chinese EV makers were awfully busy last month.

Three of Tesla's  (TSLA) - Get Free Report rivals in China -- Nio  (NIO) - Get Free Report, Li Auto  (LI) - Get Free Report, XPeng  (XPEV) - Get Free Report -- delivered a combined 65,604 vehicles in July, setting a record and surging more than 100% from a year ago.

Nio sold 20,462 EVs in July, up nearly 104% from a year ago. XPeng sold 11,008 EVs in July, which was down 4.5% from a year ago, but up 27.7% from June.

Li Auto sold 34,134 hybrid SUVs in July, up 227.5% from a year earlier and surpassing 30,000 for the second straight month.

BYD (BYDDY) - Get Free Report, China's largest EV manufacturer, sold a record 262,161 EVs in July, up 61.3% from a year ago. The company aims to sell at least 3 million vehicles this year.

Big Volume Improvements 

In the second half of 2023, Deutsche Bank analyst Edison Yu continues to expect big volume improvements from Nio and XPeng as their new product cycles ramp up, according to Investors Business Daily. Li Auto, Yu wrote in a note to clients, “could be in a more defensive position as competition intensifies.”

Tesla's wholesale vehicle shipments of the Made-in-China (MIC) Model 3 and Model Y totaled 247,217, up 120% year-over-year. The results were affected by covid-19 lockdowns last year.

Tesla, which reports global EV sales on a quarterly basis, posted better-than-expected second quarter earnings last month, despite a global EV price war.

Meanwhile, Volkswagen  (VWAGY) - Get Free Report recently announced a long-term partnership with XPeng, with the German automaker paying around $700 million for a 5% stake in XPeng as part of the partnership.

China’s passenger EV sales almost doubled in 2022, growing 87% year-over-year, according to the Hong Kong-based firm Counterpoint Research.

EVs now account for one in four cars sold in China, which the second fastest-growing market among the world’s top 10 EV markets in 2022 in terms of sales.

Looking Abroad

Japan held the top position with a 119% YoY growth, but China accounted for nearly 59% of the global EV sales volume.

The research firm noted that share of battery EVS in the country’s total EV sales decreased in 2022, with plug-in hybrid EVs increasing their share to 24%. 

“China’s EV market is the most vibrant globally,” Senior Analyst Soumen Mandal said in a statement. “More than 94 brands cumulatively offer over 300 models ranging from just $5,000 to over $90,000.”

China’s EV makers are also pursuing expansion abroad, especially in emerging markets. Last year, China’s exports of EVs increased 131.8% year on year to around 680,000 units, NBC reported.

And the EV makers in China are looking toward America. Chinese EVs are contending with a 27.5% tariff as well as tax credits that incentivize U.S.-built EVs. 

Nio CEO William Li told the Financial Times that the U.S. should offer Chinese EVs equal access to the American market. The company recently hired a U.S. lobbyist, according to Axios.