Tesla Sees China Sales Rise 18% Sequentially In January — But Upbeat Numbers Don't Tell The Full Story

Tesla Inc.’s TSLA price cuts in China — although it lifted sales in January — may not have set the cash registers ringing.

What Happened: Tesla delivered 66,051 cars in January, preliminary data released by the China Passenger Car Association showed, according to CnEVPost. The tally, which includes both exports and domestic sales, marked a 10.4% year-over-year increase from the 59,845 vehicles the company sold in January of 2022.

See Also: Best Electric Vehicle Stocks

On a month-over-month basis, Tesla’s sales rose 18.38% to 55,796 cars it sold in China in December.

However, the January number pales before the record 100,291 cars Tesla sold in China in November.

Tesla typically focuses on cars meant for exports in the first half of a quarter before turning its attention to cars meant to be sold in the domestic market. More clarity on the break-up will emerge when CPCA releases its final numbers.

Why It’s Important: Tesla has been downwardly adjusting prices in China since late last year. The biggest cuts came in the first week of January as the electric vehicle giant implemented price reductions of up 13.6% for its made-in-China Model Y and Model 3 vehicles.

Tesla China executive Grace Tao had said then the company’s cost structure in the country allowed leeway for price cuts.

Meanwhile, local media reports suggested the price cuts have brought buyers thronging to Tesla sales outlets and service centers. This was sort of corroborated by the lengthening lead times for some of Tesla’s vehicles in China.

After Tesla failed to meet the 50% delivery growth target in 2022, CEO Elon Musk recently hinted at the company internally targeting global sales of two million. The company’s explicit delivery target for the year is 1.8 million units.

Tesla’s domestic rivals Nio Inc. NIO, XPeng Inc. XPEV and Li Auto Inc. LI announced Wednesday monthly deliveries. Nio reported a 46% month-over-month sales decline and XPeng’s fell a steeper 54%. Li Auto reported a more modest drop of 29%.

Price Action: In premarket trading on Friday, Tesla shares were down 0.73%, at $186.90, according to Benzinga Pro data.

Read Next: Tesla Is Best At Stealing Customers And Keeping Them: New Report Calls Company's Brand Loyalty 'Extraordinary'