Tesla recently said that it has shifted its “export hub” from Fremont Factory to Gigafactory Shanghai, and Tesla’s July results in China are confirming that.
During Tesla’s Q2 2021 results last month, the automaker said that it is making Gigafactory Shanghai its “new primary vehicle export hub”:
“Due to strong U.S. demand and global average cost optimization, we have completed the transition of Gigafactory Shanghai as the primary vehicle export hub.”
While Gigafactory Shanghai was originally only supposed to produce vehicles for local demand, Tesla surprised itself with how fast it was able to ramp up production at the plant.
The automaker achieved an annualized production capacity of 450,000 electric vehicles at Gigafactory Shanghai within two years of starting production at the new factory.
It enabled Tesla to start exporting vehicles from the factory to other markets – reducing the exportation load out of Fremont factory, which can now focus more on local demand.
This shift is becoming clear with the release of Tesla’s July results in China.
Chinese media are reporting that Tesla delivered 8,998 vehicles in China in July, which is a significant drop month-over-month.
However, Tesla also exported over 20,000 electric vehicles produced out of Gigafactory Shanghai for a total output of 32,968 vehicles in July.
Tesla delivered 2,397 Model Y SUVs in China last month and exported 8,210 units.
Model 3 is still Tesla’s most important vehicle produced at Gigafactory Shanghai with most of them (16,137) being exported.
This could change later this year as Tesla starts production of the Model Y Standard Range in China.
Be ready for some headlines about how Tesla’s sales are “plunging” in China.
Here’s the thing: They might or they might not be.
Tesla has always used the first month of the quarter for exportation since it leaves more time for the vehicles to be in transit and still be delivered by the end of the quarter.
We are going to see better numbers for domestic deliveries in China in August and even better in September.
Those numbers are going to be compared to May and June results and then we are going to have a better idea of Tesla’s health in the important Chinese market.
In the meantime, there isn’t much to worry about.