New York (CNN Business) – Tesla is celebrating its one millionth car manufactured in China, a major milestone for the electric car company’s global ambitions. But Tesla hasn’t overcome its recent troubles in the country just yet.
The one-million milestone news came via a weekend tweet from Tesla CEO Elon Musk. But the China Passenger Car Association said Tesla had already built 974,000 cars in China through the end of July, suggesting the company manufactured just 26,000 cars in Shanghai in the first half of August. That would be slower than the pace at which Tesla was making cars there at the end of last year and early this year when it was rolling out 67,000 cars a month, according to the CPCA.
That’s also a significant slowdown from June, when Tesla ramped up Chinese production to a record pace of nearly 71,000 vehicles to make up for lost production during Covid lockdowns.
If the China plant is still not performing up to capacity, it could be a sign that Tesla won’t hit its global sales targets for the current quarter or the year, said Gordon Johnson, CEO of GLJ Research and a harsh critic of Tesla, the world’s largest electric car manufacturer.
“I think they’re doing this because there’s a lack of demand for their product,” not because of supply chain issues, Johnson said. He noted that Tesla is losing market share due to growing competition in China from both Western and Chinese EV makers.
Tesla, as is its practice, did not respond to a request for comment on its sales and production so far this quarter. Tesla had never previously disclosed its Chinese production numbers prior to Musk’s tweet, so the estimate of how many cars it had built there from the CPCA could not be confirmed.
Shanghai production has been in focus for Tesla investors after being shut by Covid lockdowns for most of the second quarter. That resulted in a rare quarter-to-quarter drop in earnings and sales at Tesla. Musk told investors last month that it was dealing with “supply chain hell” due to the lockdowns.
Still, investors cheered Musk’s tweet, and shares of Tesla (TSLA) closed up 3% Monday. The stock has been on a rally since company reported second quarter results on July 20, climbing 25% during that period. But even with that rise, shares are still down 12% for the year.