Sales of Tesla's Model Y cars in China double in May amid rising demand

Visitors check a China-made Tesla Model Y at the EV maker's showroom in Beijing. Reuters

Tesla sales of China-made Model Y cars more than doubled last month, allaying for now concern that a high-profile protest and a ban on some of the auto maker’s vehicles from government buildings due to security concerns may have hurt demand.

Registrations of the sporty SUV, which in China starts from around $53,000, rose to 12,785 in May from 5,520 in April, data from China Automotive Information Net show. Registrations of the cheaper Model 3 sedan were 9,324, up from 6,429.

April’s figures were well down on March because some production lines at the Shanghai factory were suspended for two weeks for maintenance and adjustment. Tesla only starting making deliveries of the Model Y in China in January.

“Once the Model Y gets to full production, we’ll probably see a ratio of almost a 2-to-1” versus Model 3s, said Tu Le, the managing director of Beijing-based consultancy Sino Auto Insights. “Chinese consumers love SUVs and crossovers. I think the Model Y is going to do really well toward the end of this year.”

Data from China’s Passenger Car Association released earlier this month also showed Tesla’s China shipments rebounded in May, with the electric-car pioneer reporting wholesales of 33,463 locally made vehicles last month, compared with 25,845 in April.

There’s been some concern about how demand for Tesla cars may be impacted by a protest that went viral at the Shanghai auto show in mid-April and a spate of crashes that may have soured public opinion toward the California-based company.

In another setback, some local governments and official institutions are reviewing Tesla ownership among their staff, citing concerns the cars pose security risks, Bloomberg reported last month.

The EVs have also been banned from some military complexes and housing compounds because of concerns about data being collected by in-built cameras. Tesla has moved to reassure authorities, saying any data collected in China is stored locally.

While Tesla’s May wholesale figures may not necessarily reflect the level of retail demand Tesla fields directly, the Passenger Car Association is forecasting increased interest in larger, roomier cars.

Last week it adjusted its outlook for total new-energy vehicle annual sales to 2.4 million cars from 2.2 million, noting China’s policy to allow families to have three children should benefit the automobile market, particularly in the seven-seater category.