MIC Model 3

Tesla (TSLA) China Poised For Strong Q2 2020 After NIO Reports Strong April Sales

Featured Image Credit: Tesla and Wuwa Vision/YouTube

Tesla (NASDAQ: TSLA) China could contribute significantly to the US EV automaker's Q2 2020 results yet again. According to Barron's, TSLA's competitor in China, NIO, recently reported strong April deliveries. The financial news outlet speculated that NIO's April results indicated that China's EV Market was rebounding, which bodes well for Tesla. 

NIO delivered 3,155 vehicles in April. Compared to the automaker's sales in March, NIO was up 100% in April and 180% compared to April 2019. The China-based EV automaker expects to deliver around 9,750 vehicles by the end of Q2 2020 as it has started seeing the local economy recuperating from the global pandemic. "We have witnessed the order growth to have rebounded to the level prior to the C-19 outbreak since late April," said NIO's CEO William Bin Li.

In comparison, the China Passenger Car Association reported that Tesla Giga Shanghai delivered 3,645 Model 3 vehicles in April, according to Reuters. Deliveries were down compared to the previous month. However, rumors suggest that Tesla received over 15,000 vehicle orders in April. A previous Tesmanaian article noted that demand for the MIC Model 3 Long Range RWD has increased while SR+ sales have decreased as customers expect further price reductions in the future.

The increased demand for the Long Range variant could be the reason Giga Shanghai saw a dip in April deliveries. Model 3 Long Range deliveries were expected to start in June. However, Giga Shanghai started deliveries a week or two earlier. 

Recently, Tesla reduced the price of the Model S, 3, and X in America, which seems to have affected the price of the imported Model S and X in China. Tesla China announced a price decrease of RMB¥29,000 (US$4,060) for the imported Model S and X to its customers. 

Thus far, reports of Giga Shanghai's MIC Model 3 Long Range production and progress with Phase 2 engender optimistic forecasts for Tesla as a whole in Q2 2020. Giga Shanghai's contributions to Tesla's smashing Q1 2020 results were made evident during TSLA's Earnings Call in the first quarter. The Shanghai branch could be an integral part of Tesla's success in Q2 2020 as well.

NIO's latest quarterly earnings report and its positive outlook for the second quarter bodes well for Tesla. NIO released a fairly decent quarterly earnings report Thursday morning, considering the pandemic's adverse effects on the Chinese economy at the beginning of 2020. 

The China-based EV automaker also reported a net loss of RMB¥1.72 billion (US$243.3 million, down from RMB¥2.65 billion in 2019. NIO also reported total revenue of RMB¥1.37 billion (US$193.8 million), down by 15.9%, but it beat the FactSet consensus of RMB¥1.29 billion (US$ 180 million). According to MarketWatch, FactSet had reported a loss consensus of RMB¥1.73 per share. NIO beat the consensus, reporting an adjusted loss of RMB¥1.60 per share--excluding non-recurring items. 

Legal Disclaimer --

This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Ma. Claribelle Deveza, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.

About the Author

Ma. Claribelle Deveza

Ma. Claribelle Deveza

Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.

Follow me on X

Reading next

Tesla Accessories