Tesla (TSLA) shares tumbled on Tuesday as weekly vehicle registration data from China suggested the global electric vehicle giant’s year-end stimulus was not enough to prop up Tesla deliveries.
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Insurance data indicated that China’s total sales of New Energy Vehicles (NEV) from December 19 to December 25 were about 182,000 units. That’s a 48% year-over-year increase and a 12.6% increase from the previous week, CnEVPost reported on Tuesday. However, despite the year-end rebates, Tesla registrations fell this week to an estimated 8,915. Tesla registrations for the first three weeks of December were 11,670, 12,977 and 10,254, respectively.
As China eased Covid restrictions, there have been reports of widespread outbreaks of the virus across the country. Tesla China and other China-based automakers have now warned that deliveries and production could potentially fall due to Covid disruptions.
On Tuesday, Portal reported that Tesla halted production at its Shanghai plant on December 24. Workers are expected to return on January 1, 2023. Tesla will run production in January for 17 days between Jan. 3-19 and halt electric vehicle production Jan. 20-31 for an extended Chinese New Year break, according to Portal.
In recent weeks there have been many reports of a production stop at the end of the year. Tesla’s Shanghai plant had already slowed production earlier in the month, with inventories building quickly despite a late-October price cut and significant year-end stimulus.
Tesla, which previously denied production would be suspended, said the shutdown was for annually scheduled maintenance.
Tesla shares fell 10% to 110.86 in trading on Tuesday. Last week, Tesla shares fell 18% to 123.15 after falling 16.1% the previous week. Those are the worst weekly losses since the Covid crash of March 2020. TSLA stock is at a 27-month low, 73% off the November 2021 peak.
Meanwhile competitor Tesla China no (NIO) lowered its delivery forecast for the fourth quarter on Tuesday. Electric car giant from China BYD (BYDDF) has also warned of weaker production due to Covid among employees.
China EV approvals
Despite Covid, BYD still reported huge, higher weekly EV shipments last week, even as Tesla and Nio posted week-on-week declines.
There were 51,636 registrations for BYD vehicles in the week ended December 25, up from 50,462 and 44,817 in the previous two weeks. BYD said last week that Covid cases among workers are reducing production by 2,000-3,000 vehicles a day.
Nio registration estimates slipped from 3,464 to 2,690. On Tuesday, Nio lowered forecast for fourth-quarter deliveries citing Covid outbreaks.
The EV startup now expects to deliver 38,500 to 39,500 vehicles in the fourth quarter, well below the earlier forecast of 43,000 to 48,000. That meant December sales of 14,263-15,263 – which would still be a record high.
The company said in a statement that it “has faced challenges in shipments and productions, along with certain supply chain restrictions caused by the Omicron variant coronavirus outbreak in major cities in China.”
China has downgraded the emergency status of its coronavirus outbreak, despite reports that infections are rising rapidly. China also ends quarantine rules for inbound travelers on Jan. 8, easing flight capacity and international travel restrictions.
A China-based EV startup Li car (LI) saw registrations improve to 5,155, up from 4,558 and 3,013 last week. XPeng (XPEV), another company trying to challenge Tesla in China, had 2,536 versus 3,257 in the prior week.
Tesla stock: looking ahead
Tesla is expected to release fourth-quarter and full-year global shipments on Jan. 2. Chinese electric vehicle companies Nio, Li Auto and XPeng are expected to release delivery dates for December, fourth quarter and 2022 on Sunday, January 1st. Warren Buffett-backed BYD is expected to issue its own report in early January.
Over the weekend, Nio unveiled its EC7 coupe SUV, which will likely compete against the Tesla Model Y in the high-end market. EC7 deliveries will start in May 2023. Nio also introduced a facelifted ES8 SUV, now running on the NT 2.0 platform like its all-new models. Deliveries begin in June.
As analysts ring warning bells for the auto industry in 2023, Chinese EV makers have been announcing and releasing new models, while Tesla has maintained its two-model approach in China.
In addition to Tesla shares, other Chinese manufacturers of electric vehicles also suffered early losses on Tuesday. Nio stock fell 4.7% ahead of the open. LI shares and XPeng fell more than 1%. BYD shares, which trade over-the-counter in the U.S., rose about 1%.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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