The U.S. company in the fourth quarter lost its crown as the
world's biggest electric vehicle seller to China's BYD , but during the first
10 months of 2023 both companies grew their share of a slowing and highly
competitive Chinese EV market.
Tesla (TSLA.O) sold more than 1,500 EVs in each of its
Chinese stores on average in the first 10 months of 2023, up from 1,300 in
2022, data from China Merchants Bank International (CMBI) showed.
BYD in comparison sold under 600 cars per store in the same
2023 period including plug-in hybrids, similar to its 2022 performance,
although overall it sold far more EVs than Tesla given its best-selling models
cost half as much and it has 11 times as many local distributors.
"Tesla may have more throughput per store, but their
growth is limited, especially when compared with BYD," said Bill Russo,
CEO of Shanghai-based advisory firm Automobility.
Tesla's China EV market share grew to 12% in the first 10
months of 2023, up from 10% in 2022, while BYD's share rose to 27% from 21%
over the same period as its lower-end rivals stumbled, according to data from
Automobility and the China Passenger Car Association.
Tesla's solid sales performance in China, its second-biggest
market, provides a rare bright spot for the EV maker, which has warned of the
impact of high interest rates on car buyers in other key markets like the U.S.
and slowed plans to construct a factory in Mexico.
The automaker, which pioneered a direct sales model
worldwide, monitors its 2,800 sales staff across its 314 stores in China on an
hourly basis, assessing how effective and efficient they are in persuading
potential consumers to visit stores, arrange test drives and place orders, the
three people said.
They declined to be identified because such information
about its China sales strategy, which has not been previously reported, is
deemed confidential. Tesla did not respond to a request for comment.
The people said this real-time collection of data informs
the company's pricing strategy, which allows it to influence demand for some
model versions and resulted in seven price hikes and three cuts in China last
year. The company can then make cost-effective production plans based on raw
material prices and supplies.
It manages its staff similarly to Chinese food delivery
giant Meituan (3690.HK), which measures delivery times by the minute and
second, one of the people said.
Tesla salespeople seen to have failed to be active enough
have been let go the same day, the person added.
The company incentivises its staff by offering a base salary
higher than EV rivals and allowing the best performers to earn up to 30,000
yuan ($4,203.56) a month including bonuses, drawing workers from industries
such as English tutoring and insurance known for aggressive sales tactics, the
people said.
OTHER SALES MODELS
BYD takes a more conventional approach to dealerships with
its 3,400 stores and sells plug-in hybrids alongside battery EVs. It promised
dealers up to 2 billion yuan ($279.52 million) in rewards to reach a 3 million
unit global sales target in 2023.
BYD did not respond to a request to provide further details.
Yale Zhang, managing director at Shanghai-based consultancy
Automotive Foresight, said Tesla's success with its cost-effective and
efficient direct sales model was not easily copied given its leadership in
products, technology and reputation.
The U.S. automaker's smaller EV rival Xpeng (9868.HK) has
been rejigging its sales strategy after initially following Tesla into
launching direct sales networks.
But as Tesla's model lineup ages, it remains unclear whether
it will be able to sustain its selling efficiency, especially as it enters
lower-tier cities and towns where Chinese brands have a bigger presence with
dealers, Zhang said.
In 2022, Tesla closed a Beijing store that had been its
flagship showroom in China. It also shut four stores in Guangzhou in the final
quarter of 2023.
It has been expanding in second-tier cities like Chengdu and
Tianjin, where per-store vehicle sales average 163 per month, according to
CMBI, higher than that in first-tier and third-tier cities. Tesla opened about
30 new stores in second-tier cities in 2023, a nearly 20% increase.
STIFFENING COMPETITION
While Tesla has pulled ahead of rivals in sales efficiency,
analysts have cautioned it faces growing headwinds amid stiffening competition.
"Boasting about efficiency is a way of building up a
smokescreen to explain away the fact that they're not growing at the rate of
some of their competitors," Automobility's Russo said.
Any attempt by Tesla to catch up with BYD in overall sales
will be affected by production capacity constraints at its Shanghai factory,
its biggest globally that is capable of making 1.1 million cars a year.
Tesla has signalled it wants to expand the plant but the
plan still hinges on approvals from Chinese regulators reluctant to add new EV
production facilities amid a capacity glut.
The company plans to expand its Berlin factory and build a
new plant in Mexico. But BYD has been far more aggressive, having built EV
factories in nine cities in China with an annual capacity of more than 4
million units and adding plants overseas.
Tesla's global capacity was 2 million vehicles a year, its
global production chief Tom Zhu said last March.
CMBI analysts predict the growing gap with BYD could force
Tesla to further focus on margin improvement in 2024, with price hikes on
revamped models and additional expansion into lower-tier Chinese cities, even
as its rivals scramble to price their new EVs lower.
Reuters
0 comments:
Post a Comment