By Qiaoyi Li and Brenda Goh
BEIJING/SHANGHAI (Reuters) - China's BYD extended its lead over Tesla (NASDAQ:TSLA) in China-made electric vehicles sales in July, industry data showed, as customers snapped up its lower-priced EVs and its U.S. rival idled some production to prepare for a revamped Model 3 launch.
Sales of Tesla's China-made vehicles fell 31% in July from June, data from China Passenger Car Association (CPCA) showed on Thursday, marking its first month-on-month decline since December, when it struggled with rising inventories.
Tesla sold 64,285 China-made EVs in July, up 128% from 28,217 a year earlier when a scheduled upgrade to its Shanghai factory curbed production. It has been a tradition for Tesla to upgrade production lines during the heat of summer.
Meanwhile BYD, with its Dynasty and Ocean series of EVs and petrol-electric hybrid vehicles, said it posted a 61% year-on-year rise in July sales to 261,105 passenger vehicles, including 18,169 which were exported.
CPCA is set to publish full data for July later this month, with sales of new energy passenger vehicles in China estimated to reach 750,000.
Tesla has prioritised sales growth over profit this year, firming its popularity in the world's largest auto market even though Chinese brands for the first time took more than 50% of their home market in sales terms in the first half.
Tesla slashed prices at the start of the year, initiating a price war that has drawn in more than 40 brands in China.
It offered new cash bonuses on top-selling models in China in July, as part of a global customer referral incentive, kicking off a new round of price cuts as General Motors (NYSE:GM) and Volkswagen (ETR:VOWG_p) followed.
Tesla was the only foreign brand to increase its market share in China in the first half, according to Chinese industry data. Its second quarter China deliveries hit a record 156,676.
Still, BYD outsold Tesla China by 29% in EV sales in the first half while its lower-priced Dolphin EV outsold Tesla's Model 3, which is expected to be revamped in September.
Chinese EV startups such as Nio (NYSE:NIO) and Xpeng (NYSE:XPEV) also saw their deliveries rebound in July as they ramped up deliveries of newly launched SUV models ES6 and G6.
China wants to boost sales of cars and other big-ticket items as its post-COVID-19 economic recovery has lost steam.
Authorities unveiled measures to increase automobile sales last month. In June, they announced an extension of a purchase tax break on new energy vehicles (NEVs) until 2027.