Tesla Production in Shanghai Remains Strong as China Surpasses Europe in Firm’s Market Share

California-based electric car company Tesla Inc. released its 2021 second quarter financial report on Tuesday, showing promising developments for its manufacturing and sales performance in the Chinese market.

Apart from achieving quarterly records in global delivery and earnings – over 200,000 vehicles and $1.1 billion in profits – Tesla announced it has “completed the transition of Gigafactory Shanghai as the primary vehicle export hub.”

After initiating production in 2019, the firm’s sprawling facility in Shanghai’s Pudong District is now honing in on its intended capacity of 500,000 vehicles annually, including the company’s Model 3 and Model Y designs.

The Shanghai plant can now increasingly be implemented to help ease delays in Tesla’s delivery to the European market, where the firm said “demand remains well above supply.” Adding to Tesla’s woes in the region, construction of a Gigafactory outside Berlin has been hampered recently by local opposition and bureaucratic hurdles presented by German authorities.

The financial report also offered positive signs regarding Tesla’s performance among Chinese consumers.

Earlier this month, Tesla China unveiled a new Model Y for the Chinese market costing 276,000 yuan ($42,000) – a significantly lower price than other cars offered by the company. The move has so far proven successful as a wave of purchasing in China has pushed the delivery of new Model Y orders to early October.

SEE ALSO: Tesla Introduces Significantly Cheaper Standard Range Model Y for Chinese Market

The document also indicated that the overall market share of Tesla in China has now surpassed that of Europe, now accounting for just over 1% of all light duty vehicles in the country, according to company estimates.

In terms of market share, China now trails only the U.S./Canada region, where Tesla vehicles account for approximately 1.7% of the sector.

The figures suggest that Tesla has managed to overcome a series of significant setbacks it has faced recently in its attempt to crack the Chinese market, including last month’s soft recall of almost 300,000 China-made vehicles.

SEE ALSO: Tesla to “Recall” Model 3 and Model Y in China for Online Software Update

Moreover, the global chip shortage and regional port congestion has added further constraints on Tesla’s production in Shanghai. Tesla expressed in its report that “component supply will have a strong influence on the rate of our delivery growth for the rest of this year.”

The EV juggernaut also faced a dramatic public relations crisis in China earlier this year, as allegations of braking failures followed by pressure from national authorities inflicted a temporary dent in domestic sales.

SEE ALSO: Tesla’s China Orders Halved in May Amid Regulatory Pressure and Public Relations Crisis, Report Says

As demand for clean energy passenger vehicles in China continues to expand, Tesla’s ability to maintain both a healthy reputation as well as high domestic production capacity will be essential.