Tesla (TSLA): February Sales Up 18% in China, On Track to Deliver 200K+ Units

Wedbush analyst Daniel Ives took note of the latest February data from China, signaling a drop in sales for BYD, Nio (NYSE: NIO), Xpeng (NYSE: XPEV), and Li Auto (NYSE: LI), and a further market share increase for Tesla (NASDAQ: TSLA).

The US-based EV company delivered 18.3k vehicles in February, up 18% from January. Ives also says the company is “on a strong trajectory into March.”

Therefore, February results are described as “quite impressive” and ahead of the Street expectations.

“We believe from a run-rate perspective Tesla is on track to be on a 200k+ unit trajectory in China for the year which remains a linchpin for the company hitting its 750k to 800k annual numbers for the year. From a production perspective, Tesla produced 23.6k Model 3/Y in about 21 days during February in China with some of these cars shipping to Europe,” Ives wrote in a note sent to clients.

XPEV announced this morning to deliver 12,500 vehicles in Q1, while Nio said earlier it expects to deliver between 20,000 - 25,000 units in the same period. Xpeng delivered only 2,223 cars in February.

“We believe price cuts and the Model Y introduction were key to some of these changing market dynamics in China. That said, overall EV demand in the region looks robust with EV penetration set to go from 4.5% in China for 2020 to 10% by 2022 in this EV arms race with Tesla and its Giga footprint front and center,” adds Ives.

He also takes note of the recent selloff in EV stocks, but says the strong February demand is “key.”

“Tesla is poised to gain considerable market share in the key China region over the coming years,” concludes Ives.

Wedbush maintains the $950 price target on TSLA, with a “Neutral” rating left unchanged.

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