Tesla Sells 100,291 China-Built Vehicles in November, a Record High

author: Eric Walz   

Tesla's factory in Shanghai began producing cars in late 2019.

Electric automaker Tesla had its biggest sales month ever in China during the month of November with sales of 100,291 vehicles, Xinhua News Agency reported on Monday. It's the highest number of vehicles since Tesla's Shanghai factory began assembling cars in late 2019. 

Tesla record-breaking sales represent a YoY increase of 89.7% compared to Nov 2021 and nearly a 40% jump from October when the company sold 71,704 vehicles. Tesla's November sales are also 17% higher than the 83,135 vehicles that the automaker sold in September in China. 

Tesla delivered 343,830 vehicles worldwide last quarter, which was the highest number in the company's history. The company is aiming for 50% average growth over the next several years, which will require that Tesla significantly boost is global production capacity. 

Year to date, Tesla sold 655,069 China-made vehicles since January, which is a 62.8% increase from the 402,231 China-made vehicles sold in the first 11 months of 2021, according to data monitored by news outlet CnEVPost.

Tesla's production ramp up in China was made possible after improvements and upgrades were made at its Shanghai factory over the summer. The recent upgrades included machinery maintenance. The improvements by automation and control engineers took about five weeks to complete. In July, Tesla had to temporarily suspend most vehicle production in Shanghai in order to complete the upgrades.

Tesla is also making improvements to increase vehicle production at its factory in Fremont, California. On Nov 1, Bloomberg reported that Tesla brought in engineers and production staff from China for assistance in getting the plant ready to increase output, citing people familiar with Tesla's plans. 

Approximately 200 workers from China, including automation and control engineers, are assisting in getting the factory ready to boost output. The assignments in the U.S. will last around three months, according to the people that spoke with Bloomberg.

Tesla's California factory currently builds the Model S, X, Y and 3 vehicles. 

Earlier this year, Tesla began production of the Model Y at its factory in Germany. These vehicles are being sold to customers in Europe. Tesla is also expanding its newest factory in Austin, Texas to produce more vehicles

Tesla's factory in Shanghai, which began producing cars in Dec 2019, allows it to avoid tariffs by building cars locally for customers in China, as well as for export to countries outside of the U.S. The plant builds Model 3 and Model Y crossover. Of the 71,704 vehicles sold by Tesla Shanghai in October, 54,504 of them were exported and the remaining 17,200 vehicles were delivered to customers in China, CnEVPost reports.

New EV sales in China are also being boosted by the elimination of a 5% tax on the purchase of a new energy vehicle (NEV), which are classified as purely electric, plug-in hybrids and fuel cell powered vehicles.

In September, China extended the 5% tax exemption though next year. It was originally set to expire at the end of 2022. The Ministry of Finance, State Taxation Administration and Ministry of Industry and Information Technology said in September that buyers of NEVs will be exempt from the 5% tax through next year. The move is designed to increase the EV adoption rate in China.

Tesla's Rear Wheel Drive Model 3 sedan starts at 265,900 yuan (US$38,193) in China. The RWD Model Y starts at 288,900 yuan ($41,496). 

Tesla is also offering its own subsidies in China in the form of reward points in order to boost sales of the Model 3 and Model Y this month. According to Tesla's China website, from Dec 1- 31st, customers that purchase a Model 3 or Model Y online and complete delivery by the end of the year get 20,000 "treasure box" point rewards. These points can be used to exchange for prizes, including vehicle accessories and super charging sessions.

Customers purchasing a Tesla vehicle in December along with corresponding auto insurance through the automaker's cooperative insurance agency in China will also receive an insurance subsidy of 4,000 yuan (US$574).

Despite Tesla's growing sales in China, competition is growing as sales of EVs from local automakers BYD, Xpeng and NIO continue to climb. BYD was the top-selling car brand in China in the first four weeks of November. The automaker sold 229,942 plug-in hybrids and pure electric vehicles in China last month. It's more than double Tesla's total monthly total.

Following the news of Tesla's record sales of vehicles built in Shanghai, Reuters reported on Monday that Tesla plans to cut production this month. According to Reuters, Model Y output at the plant is slated to be reduced by over 20% compared to November per sources with knowledge of Tesla's plans. However, the automaker denied the report. 

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.