Deep discounts and tax breaks for environmentally friendly and electric vehicles boosted consumer sentiment, allowing China's passenger vehicle sales to return to growth this past month, even as economic growth remains weak.
According to data from the China Passenger Car Association (CPCA) released on Friday, car sales saw a 2.2% increase in August compared to the same month the previous year, reaching a total of 1.94 million units, marking the first year-on-year growth since May.
Thanks to substantial discounts, Tesla (NASDAQ:TSLA) significantly expanded its market share in China's EV market in August, nearly doubling their share to 13.2%, up from 7.5% in July.
The electric automaker achieved sales of 64,694 vehicles in China during the month of August. Additionally, the China-made Model Y recorded 65,316 deliveries last month, surpassing the sales of other passenger vehicle models reported by the CPCA.
A price war initiated by Tesla at the start of the year continues as the U.S. EV maker recently announced further price reductions, following two price cuts made last month. However, it's worth noting that the company introduced its redesigned Model 3 with a starting price that's 12% higher than the previous base model with rear-wheel drive.
Shares of TSLA are down 1.20% in mid-day trading Friday.