Tesla is dominating the electric vehicle market in China but next year, it is expected to face unprecedented challenges from its rivals.
This year, Tesla has sold approximately 120,000 vehicles in China, making the Asian nation the carmaker’s second-largest market behind the United States. As impressive as that figure is, some analysts believe Tesla’s Chinese sales will skyrocket next year but local EV makers should also experience sales increases.
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The China Passenger Car Association speculates that Tesla could sell as many as 280,000 vehicles in the country next year, spurred on by the fact that the Model Y being built at Tesla’s Shanghai Gigafactory is clearing the final regulatory stages before sales of it commence next year. Elon Musk expects the Model Y to outsell the Model 3, Model S, and Model X combined.
“China could see eye-popping demand into 2021 and 2022 across the board with Tesla’s flagship Giga 3 footprint a major competitive advantage,” said Wedbush Securities analyst Dan Ives in an interview with Bloomberg.
While Tesla’s sales in China are expected to rise, the China Passenger Car Association predicts total sales of 1.7 million new energy vehicles in the nation in 2021, meaning more than 80 per cent of the market will remain up for grabs. Companies such as Nio, Xpeng, and Li are in an excellent position to capitalize on growing EV sales.
“Since June, you’ve seen a steady rise in sales by Nio, Xpeng, and Li,” said chief executive of advisory firm Automobility Ltd, Bill Russo. “Can you stay competitive with these fast-moving, internet-backed, very deep-pocketed companies?”
It’s not just Chinese automakers that Tesla needs to worry about. Traditional car manufacturers like Volkswagen and Mercedes-Benz are aggressively expanding into the electric vehicle space and European sales figures reveal that the VW ID.3 is already selling like hotcakes.