Tesla China shipments soar to record as plant fires back up

Tesla’s shipments from its Shanghai car plant surged to a record last month, a dramatic recovery from lockdown measures that stunted output for weeks.

The electric-car maker delivered 78,906 vehicles in June, more than double its total a year ago and up 145% from May, according to China’s Passenger Car Association.

Tesla shipped 77,938 of those cars to the local market and just 968 units went abroad.

Tesla’s monthly deliveries from China sunk to 1,512 vehicles in April, with zero exports, as Shanghai’s shutdown forced the company to suspend production for around three weeks.

The loss of output from its most productive plant contributed to the company getting fewer cars to customers in the last three months than either of the previous two quarters.

Tesla shares were little changed as of 10:01 a.m. Friday in New York trading. The stock has dropped about 31% this year.

The carmaker went to extraordinary lengths to get its Shanghai factory back up and running, bringing in thousands of workers under an elaborate closed-loop system that kept them on site and tested regularly.

Employees were finally let out on June 10, after the plant resumed around-the-clock production and supplies and logistics were essentially back to normal.

Overall passenger vehicle sales in China increased 22% from a year ago to 1.97 million units in June, the PCA said.

New-energy vehicle retail sales came in at 532,000, up around 131%.

Demand for combustion engine cars is expected to be stable for the next couple of months before rising strongly in the fourth quarter as buyers rush in before government tax cuts for such vehicles, aimed at spurring automobile sales, are phased out at the end of 2022, the PCA said earlier this year.

BYD Co., the Chinese automaker backed by Warren Buffett’s Berkshire Hathaway, also put in a strong showing in June, delivering 133,762 new-energy cars, comprised of both pure-electric and plug-in hybrid models.

In May, China cut the purchase tax levied on some low-emission passenger vehicles by half, building on previously announced measures to support businesses and consumer spending.

Several local governments and automakers have since pitched in with subsidies and incentives to entice buyers.

While June was a bumper month for Tesla, shipments for July may not be so strong.

In an effort to ramp up output from Shanghai longer term, the company plans to partly suspend manufacturing capabilities at various points through early August to upgrade production lines.

Work at the factory south of Shanghai is expected to be complete by around Aug. 7, with output of the Model Y sport utility vehicle then increasing to 14,000 units a week, from about 11,000 pre-pandemic.

And, production of the Model 3 sedan at 7,700 units a week, from 5,500 previously, people familiar with the matter said last month.