Tesla’s decision to open a factory in China is quickly proving to be a good one.
The Silicon Valley automaker delivered 10,160 electric cars in China in March, its highest-ever monthly total in the world’s largest new-car market, according to the China Passenger Car Association (CPCA) trade group.
Those sales represented 30% of China’s electric-car market, according to the CPCA, which uses a different counting method than Tesla’s own delivery figures, according to CNBC.
The CPCS data showed that Tesla sold around 3,900 cars in February and 2,620 in January.
This represents remarkably quick progress for Tesla, which broke ground on its Chinese factory in January 2019, and delivered its first China-manufactured cars to local customers near the end of last year.
Tesla starts delivery of Chinese-made Model 3 sedans on December 30, 2019
The automaker previously imported cars from its Fremont, California, factory, but shipping costs and import duties inflated retail prices. Cars built in China are now expected to deliver higher profit margins than cars built in the United States.
Tesla produced nearly 103,000 cars at its two factories in the first three months of 2020, its best start to a year yet.
The Chinese government has granted Tesla some notable favors. Foreign automakers planning to build cars in China have traditionally been required to form 50/50 joint ventures with local firms, but Tesla is allowed to operate a factory by itself under a special agreement with the government. In 2019, Tesla was also granted an exemption from a 10% purchase tax.
Tesla currently builds the Model 3 at its Chinese factory, and plans to add the Model Y as well. The automaker hopes to achieve an annual production of 150,000 cars at the factory.
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