Tesla Shares Rise Over 4% after China's EV Sales in May Jump 61%

BEIJING, June 8 (TiPost)— Shares of Tesla Inc. surged Thursday about 4.6% to $234.86, the highest close in eight months. With the largest daily percentage rally since May, 26, the electric vehicle (EV) behemoth’s shares rose for the tenth straight session, the longest winning streak since January 8, 2021.

Source: Visual China

Retail sales of New energy vehicle (NEW) ,the sector including battery electric vehicle (BEV) and the plug-in hybrid electric vehicle (PHEV), rose 60.9% year-over-year (YoY) to 580,000 units in May, the China Passenger Car Association (CPCA) released on Thursday. As a key driver of the auto industry, NEV showed more healthy growth again. NEV retail sales accounted for 33.3% of total passenger cars sold of 1.742 million, representing a 28.6% YoY increase and a 7.3% of monthly increase. While yearly growth somewhat cooled down, NEV sales reversed monthly decline in May. NEV retail sales increased 10.5% from the previous month, compared with a month-over-month (MoM) decline of 3.8% in April. NEV wholesale sales grew 11.4% MoM to 673,000 vehicles while April saw a 2.3% decrease. The total whole sales of passenger car stood at 1.997 million in May, up 25.4% YoY and 12.4% MoM.

CPCA earlier this week estimated wholesale sales of Tesla China climbed 142% YoY to 77,695 units in May. The yearly increase slowed down compared with the astonishing YoY growth of 4900% in April, but the volume in the past month edged 2.4% higher from April, or 1,853 vehicles more than that in April.

It is unsurprising that the YoY growth of overall sales this month could be negative, as the sales boost a year earlier due to the halved car purchase tax for passenger vehicles effective from June 1 to the end of 2022, CPCA cautioned. However, the auto industry body expressed upbeat on NEV, citing a State Council meeting last Friday that asked to extend and optimize the purchase tax break for NEV. Such tax incentive will have more outstanding stimulus on consumption because it directly reduces the tax burden on shoppers, and seems more impressive than the subsidy, CPCA noted.

It is noteworthy that Tesla shares showed stronger rally following CEO Elon Musk’s visit to China. Shares have charged up more than 28% over the past ten days and around 17% from last Tuesday, the day Musk landed the country.

The United States and China share intertwined and inseparable interests, and Tesla opposes decoupling, Musk remarked when he met with Chinese State Councilor and Foreign Minister Qin Gang on Tuesday. The executive said Tesla is willing to continue to expand its business in China, and share the country's development opportunities.

Talking with the Minister of Commerce Wang Wentao, Musk agreed that the relationship between the United States and China is not a zero-sum game. He appreciated Beijing’s support and guarantee for Tesla's Shanghai factory during the Covid-19 pandemic, and praised the vitality and potential of China's development. He expressed full of confidence on Chinese market and willingness to continue deepening mutually beneficial cooperation.

Tesla is urging Chinese suppliers to build facilities in Mexico, an effort to replicate its success in Gigafactory Shanghai as it plans to set to its new production base in the American country, Chinese news media outlet 36Kr learned earlier this week. Musk confirmed the plan to establish a Gigafactory located in Monterrey, Mexicon, during Investor Day 2023 three months ago. A government official said Tesla would bring an investment of about $5 billion for the construction of the plant.