Benzinga - by Ramakrishnan M, Benzinga Editor.
EV giant Tesla, Inc. (NASDAQ:TSLA) is going through a rough patch as CEO Elon Musk pushes his "blindingly obvious" robotaxi vision through a sea of skepticism amid a slowdown in the EV industry marked by price wars, bankruptcies and job cuts. However, a rewind reveals Tesla’s remarkable success in conquering the Chinese electric car market.
Decade Of Dominance: Ten years ago, Musk handed over Model S keys to prominent Chinese figures, including future rivals Xiaomi founder Lei Jun and Li Auto founder Li Xiang, as per CnEVpost.
Back then, Tesla was a fledgling company, delivering just over 22,000 cars globally from its sole auto factory in Fremont, California. Notably, neither Li Auto nor its competitors Xpeng and Nio were even established, and Xiaomi focused solely on smartphones.
Giga Gamechanger: Recognizing China’s burgeoning EV potential and government support, Tesla established its second factory, Giga Shanghai, in 2019. This 4.5-million-square-foot facility produces the popular Model 3 and Model Y SUVs and employs nearly 20,000 workers today. In September last year, the factory rolled out its 2-millionth vehicle.
Fast forward to 2024, Tesla boasts over 1.7 million Chinese customers, nearly a third of its global base.
Celebrating 10 years since the first-ever delivery of Tesla Model S in China—thanks to our 1.7 million Chinese owners, our partners, supporters and industry advocates. Together, let's accelerate the world's transition to sustainable energy! ❤️特斯拉中国首批车主交付十周年… https://t.co/Hf0aXK8KeP
— Tesla Asia (@Tesla_Asia) April 22, 2024
Interestingly, its closest competitor is China’s BYD Co., a company Musk once dismissed. BYD, which started with mobile phone batteries in 2003, surpassed Tesla as the world’s largest BEV manufacturer in late 2023 (Tesla recently grabbed back this crown).
A Good Bet Anyway? A $1,000 investment in April 2014, coinciding with its China entry, would have technically yielded roughly 69 shares (after accounting for stock splits in 2020 and 2022), now worth $10,085 — a significant 908.57% gain.
| Tesla Stock (TSLA) | $1,000 | $10,085 (~ 69 shares) | 908.57% |
For comparison, let’s consider investments in fledgling Chinese EV startups Nio, Xpeng, and Li upon their U.S. debuts:
| Nio Inc. (NYSE:NIO) | $1,000 | $383.8 | -61.62% |
| Xpeng Inc. (NYSE:XPEV) | $1,000 | $304.1 | -69.59% |
| Li Auto Inc. (NASDAQ:LI) | $1,000 | $1,648.8 | 64.88% |
While Li Auto is the only one from the Chinese trio to offer a positive return, it pales in comparison to Tesla’s surge.
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