Tesla Model 3 sales in China drop 64% in April: CPCA

According to the China Passenger Car Association, Tesla only sold 3,635 Model 3 vehicles in China last month, down 64% from sales in March. Yahoo Finance’s Emily McCormick joins Seana Smith to discuss.

Video Transcript

SEANA SMITH: I want to get to Tesla. It's a stock that we are watching today. So they're out with new numbers, or we did get new numbers for Tesla. So sales of its Model 3 plunging in the month of April, falling about 64% from March. Now, this is according to numbers from the China Passenger Car Association. I want to bring in Emily McCormick who has more on this. And Emily, it's interesting when you take a look at the drop for Tesla because it comes despite a nearly 10% climb in electric car sales in China during the month of April.

EMILY MCCORMICK: Absolutely, Seana. So this is something that has been a bit perplexing, just essentially because we've seen the recovery in the Chinese consumer, listening to other company earnings reports really starting to talk about a stabilization, particularly in the Asia-Pacific region, but not necessarily seeing that for Tesla specifically. So to reiterate those numbers that you just laid out by the China Passenger Car Association, Tesla China sold 3,635 Model 3 vehicles in April. That was down from about 10,160 from March, which itself had been up significantly from February's 3,900 units.

So seeing a bit of wobbliness here as Tesla ramps production for the Shanghai Gigafactory. It's not entirely clear what may have contributed to this reported decline, but we do know that CEO Elon Musk said during an earnings call in late April that Tesla was lowering the price of the Model 3 made in China but said he was still confident that would provide a good gross margin.

So demand concerns have been something that have been floated by Wall Street in the past as a concern for Tesla. Of course, the company itself has vehemently denied that this is the case but something to keep an eye on just going forward, especially as we see the company struggling with some of these supply and demand concerns with the coronavirus pandemic still ongoing.

SEANA SMITH: All right, Emily McCormick, thanks so much for breaking that down for us.