Tesla (TSLA) stock is on the move today after the automaker reported strong China sales.
Tesla’s wholesale shipments for February from its China factory rose 32% from a year ago to 74,402 vehicles, according to China’s Passenger Car Association (CPCA). That also figure represents a 13% jump month over month from January.
Shares of the EV maker were up nearly 4% in early afternoon trading on Friday.
The increase in February shipments is not surprising given that CPCA said February sales of new energy vehicles, which include battery electric and hybrid sales, rose by 30% overall. And it noted last month that January would be a “weak” month for overall sales in the region due to the Chinese New Year.
Nevertheless, stronger sales in February for Tesla is a positive development as competition rises in the important Chinese EV market, where Tesla is getting an increasing amount of its global sales.
“Tesla’s continued growth in China should come as no surprise,” Chandan Kumar, head of products at ETF provider Indxx, said. “As a logical result of this Tesla, despite what many Americans may think, only gets roughly 31% of its total sales from the US, with the rest essentially all from China and Europe.”
Recent price cuts in January of the Chinese-made Model 3 and the Model Y — which were cut by 13.5% and 10%, respectively — are clearly giving Tesla a boost in the region, despite competitors like BYD outselling them in February. BYD’s new energy vehicle sales jumped by over 100% to 193,655. Meanwhile, Tesla’s share of the new energy market in China slipped to 9% from 10% while BYD’s share rose to 37% from 27%, according to the CPCA.
Tom Zhu, Tesla’s head of global manufacturing (and likely heir apparent to CEO Elon Musk), addressed concerns about demand in China earlier this week at Tesla’s Investor Day.
“As long as you offer a product with value at an affordable price, you don’t have to worry about demand,” Zhu said during the Q&A portion of the event late Wednesday evening. Zhu noted the price cuts in China “generated huge demand, more than we can produce, really.” Tesla also cut prices in Australia, Japan, and South Korea in order to gin up demand.
The price cuts of course were cheered by new Tesla buyers in China but were met with deep resentment and protests by recent buyers who were not given a refund or other forms of compensation, such as free charging, when the price cuts were announced.
According to Tesla’s China website, the current wait time for all versions of the built-to-order Model 3 stands at one to four weeks, and the wait time for the Model Y SUV (RWD and dual motor) is two to five weeks.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance