After a disappointing number of deliveries in the Chinese market in April, Tesla’s sales reports for vehicles made at Gigafactory Shanghai jumped by 29% in May. Tesla delivered a total of 33,463 vehicles made at the factory.
This includes 21,936 vehicles sold in China and 11,527 vehicles exported to Europe. In April, Tesla delivered a total of 25,845 vehicles manufactured at the Chinese factory. Tesla manufactures Model 3 and Model Y vehicles at Gigafactory Shanghai.
As far as Tesla is concerned, manufacturing Model Y vehicles in China for the European market may be a make-do measure until Germany can sort out the bureaucratic red tape delaying the grand opening of Gigafactory Berlin. The company plans to assemble the Model Y and manufacture batteries at the German factory. Although some of the delay may be caused by recent changes to the paperwork reflecting its updated plans for manufacturing batteries and some product lines at Gigafactory Berlin, it has also grumbled about the snail pace of the German regulatory bureaucracy. It has had to delay the opening of Gigafactory Berlin to as early as Q4 2021 due to the bureaucratic delays.
Until then, Tesla has proven capable of making do with existing manufacturing capacity at Gigafactories like the one in Shanghai despite recent tensions with China that includes safety concerns and the Chinese government’s worry about spying. The company recently had to recall 30,000 Model X and Model Y vehicles in China to fix a suspension issue. It also faced bad publicity due to reports of battery fires and unintended acceleration even though the United States’ National Highway Traffic Safety Administration concluded that cases of unintended acceleration were likely due to user error instead of flaws in the vehicle after an investigation.
China banned Tesla vehicles from parking at government facilities due to concerns that their onboard cameras could capture footage of sensitive activities at those facilities. Although Tesla has denied that those cameras are active, it opened a data storage center in China to locally store any data that might be picked up by the cameras and sensors.
Tesla has also filed a lawsuit against a Chinese news outlet that claimed that the company makes use of “sweatshop” practices at Gigafactory Shanghai, alleging that the claims were false and amounted to libel. Although Tesla does have a reputation for being anti-union, this particular case could have been a matter of the pot calling the kettle black, considering that China has a history of human rights abuses that include forced labor and genocide against targeted populations like the Tibetans and Uighur Muslims.
Although some early reports did indicate that Chinese orders of Tesla vehicles were not quite as strong as they could be in May with only 9,800 vehicles ordered, Wedbush analyst Dan Ives did say that the higher number of actual deliveries could indicate that the “pent up demand story remains firm for Tesla for the next few years.” Wedbush put a price target of $1,000 per share on Tesla stock (TSLA).
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