Tesla Motors saw a drop in registrations for Model S sedan in China for February. According to JL Warren Capital, registrations dropped 45%, indicating that the car maker’s sales in the world’s largest auto market have remained weak.
China remains a concern for Tesla
During the month, total registrations clocked in at 260, a drop from 469 in January, as per the data. Additionally, JL Warren noted that the electric vehicle manufacturer imported 63 of its luxury cars to China in February after shipping only around 10 in January, which is a drop from the hundreds monthly during the fourth quarter of the previous year.
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Junheng Li, the New York-based firm’s head of research, said in an interview with Bloomberg that the number of units shipped is one of the parameters taken to estimate monthly incremental demand strength for the Model S. Going by the data, a sharp weakening in demand can be seen.
JL Warren noted that around 1,600 Tesla cars shipped to China remain unregistered. Li mentioned that the unregistered Model S sedans could have been purchased by scalpers who “are hoping to flip it,” adding that demand is much less than what Tesla expected.
Can Tesla recover in the long term?
The Palo Alto-based company is expecting sales to come in at 55,000 cars this year globally, which is a hike of 74% from last year. Tesla does not give separate sales for the region, but the company is confident on its long-term prospects in China. During a conference last month, Tesla CEO Elon Musk said, “Even if our sales in China were zero this year, zero, I’m still confident we can do the 55,000 cars. They won’t be zero.”
Model S cars debuted in China in April 2014. Musk, who is in China this week, previously expressed his dissatisfaction towards the company’s sales force in the country. Musk will address a breakfast forum on Sunday in Hainan. Tesla is working towards strengthening its charging infrastructure in the country, which it considers to be the main reason for low sales.
On Thursday, Tesla shares closed down 2% at $190.41, and year to date, the stock is down by over 14%.