With the recent negative news coming from China, JPMorgan looked at Tesla's success in the country and found that there was no real cause for concern. The company's cars are still popular, and some of the competitors will leave the market over time. JPMorgan released a note describing its findings regarding the Chinese EV market and Tesla's place in it.
Several days ago, some media reported that Tesla orders in China were cut in half in May compared to April. It was also reported that the waiting time for order fulfillment decreased, which was the reason for the above thesis. In order to verify the accuracy of this information, JPMorgan's representatives visited three Tesla stores in Shanghai and spoke with several sellers.
According to the information received, the waiting time for customers to receive Model 3 and Y delivery has generally decreased compared to Q1 2021. However, this is largely due to the simplification and rationalization of the Shanghai government of the buyer registration process for obtaining a “green license plate” under purchase quota regulations in the city. It used to take two to three months from purchase to final delivery (including obtaining an official green license plate). Now this time has been reduced to about one month. The queues for license plate registrations literally consist of Tesla vehicles.
New vehicles waiting for inspection at Shenzhen Vehicle Administration before license plates are issued.— Ray4Tesla⚡️🚘☀️🔋 (@ray4tesla) June 5, 2021
So many new Model Ys are spotted. “WTF! What’s going on?” asked the man in the video. pic.twitter.com/W3nMV4yp5f
We'll find out in the next day or so if this is true, but three days ago @ray4tesla shared a rumor that $TSLA GF3 production could be as high as 45K for May, with 20K domestic sales and 25K exports. Now @MilMileBattery shared a purported Weibo post stating the same thing.— Æx (@anonyx10) June 7, 2021
At the moment, the competition in the Chinese market is heating up. JPMorgan expects more competitors to share the same addressable market with Tesla in the next 12-24 months, a dynamic similar to that seen in the smartphone market after Apple expanded its presence in China in 2007. However, the competition in the smart electric vehicle market will be similar to the competition in the battery market in China. The number of registered battery suppliers here has dropped significantly over the past decade, from nearly 200 to less than 30-40 today. Among those who have survived the competition and consolidation of the industry, only 5-10 are the best. The electric car market will also face this, and only large companies like Tesla will be able to survive and lead the charge forward.
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