Despite the chip shortage, supply chain issues, and economic turmoil still persisting as a result of the COVID-19 pandemic, Tesla has arguably fared very well. While many global automakers are struggling to ramp up inventory, Tesla is producing and delivering cars at record levels. Nonetheless, after several recent moves by the US EV maker in China, the media is suggesting demand is waning.
Tesla recently reduced prices in China, added some local incentives, and it seems it may be exporting more vehicles than usual rather than delivering them domestically. However, the latter could begin to change quickly as the end of the quarter and the year near their end. Regardless, it seems to make sense that Tesla would be exporting vehicles to areas where people are waiting months and months to take delivery rather than delivering them locally when production is at its highest level yet and delivery times are greatly reduced.
In the past, whenever Tesla reduced delivery times, there were almost immediate reports of a lack of demand, which may certainly have been the case. However, there have also been reports that Tesla can't keep up with demand, and should produce cars more quickly.
Now, the automaker has upgraded and expanded at some factories while also building two new factories. The company is now able to produce significantly more cars than it ever has before, which is how it planned to reduce the long wait times for its vehicles.
At any rate, there more substantial rumors are now coming out of China that Tesla's recent actions signal a drop in demand. Local media company Huxiu has pointed to "sources familiar with the matter," to say that Tesla's orders in China are lower than expected. More specifically, the report claims that since Tesla reduced prices on the Model 3 and Model Y, there have only been 50,000 new orders, compared to the 100,000 to 170,000 that were reportedly referred to online.
Huxiu went so far as to suggest that the Model 3 is no longer as popular in China as it once was, Tesla stores are seeing reduced foot traffic, and Tesla China will likely reduce prices again in the near future.
Tesla has taken notice of the reports by Huxio and responded. Not surprisingly, the electric automaker says the media outlet's claims aren't true. That said, it seems the Tesla spokesperson didn't provide any details or proof of recent orders or deliveries.
Clearly, it's difficult to know for sure if Tesla is seeing reduced demand in China. With the current situation across the globe, it would come as no surprise if orders are slowing, though the EV maker still stands to break production and delivery records yet again. Since Tesla is a global automaker, it can potentially have reduced demand in some markets while demand grows in others.
At this point, all we can do is wait and see what the numbers tell us after the year comes to an end. Will Tesla achieve 50 percent year-over-year growth as guided? Start a conversation in the comment section below.