Tesla is in a Road Race with Chinese EV Makers

In June, it seemed like Tesla traverses a road no one ever dared to take after achieving record-high sales.

The unprecedented deviation to more efficient technology, particularly in sustainable electric cars placed the revolutionary firm into the map.

Today, Tesla’s competitors are gaining the speed needed to catch the drift.

Investors are looking towards the East to find the next leader of modern technology vehicles. This makes Chinese electric car makers race to compete with Tesla.

Sentiment to electric vehicles is on the rise in recent years, luring firms to capitalize on the opportunity. Although initially costly, growing awareness on sustainability and lesser need for maintenance explain the shift in consumer behavior.

Although EV still occupies a relatively small portion in the global market, it is growing at a faster than expected rate.

Tesla’s growing popularity results in skyrocketing per share price reaching $1,750/share in July. Explosive growth led shares of the firm to reach a 287% growth on year-to-date. This was 652% in size from the same period last year.

Although scheduled five-for-one stock split is due to take place by the end of August, investors are in the serious lookout for the “new Tesla” in China.

How is Tesla Hedging against China’s EV Leaders?

China’s electric car makers join the bandwagon, with many getting financial support from both public and private investors.

By the start of the month, Nio, a leading competitor of Tesla in the Chinese market, recorded booming vehicle deliveries at 10,331 units. This is nearly triple from the number it generated from the same period last year.

Similarly, Li Auto raised $1.1 billion after offering depository shares to its 95 million investors for its IPO in the United States last 2019. Since then, the firm’s shares rose by 30%.

Another electric car startup from China that headlines the technology is Xpeng. It finally filed for IPO in New York Stock Exchange last week.

In July, Tesla experienced a month-on-month drop by 24%, now at 11,456 electric vehicle registrations from 14,976 in June. The Musk-led firm has a total of 61, 217 registered units in China.

This is due to a stiffer competition not only with emerging local EV firms but also against established brands such as BMW and Mercedes.

Amid competition woes, CEO Elon Musk announced the introduction of the “long overdue” two-factor authentication on the Tesla app. The new feature, now on its final validation, will use an SMS-based and app-based authentication altogether.

The app is used for many of the car’s features such as locking or unlocking, locating the vehicle, and tracking its movement, among others, therefore security is of paramount importance.

There has no been announcement for the public release date of the new security feature.