Tesla US Sales Drop 39%, China Up 64% In Third Quarter

Electric car maker Tesla reported a 39 percent drop in the third-quarter sales revenue in the United States.

However, Tesla's China sales of electric cars rose 64 percent to $669 million, according to the regulatory filing based on geographies.

This is the first major sales drop in the domestic market for more than two years. The U.S. sales fell to $3.13 billion from $5.13 billion a year earlier, per Tesla news.

Reports by CNBC and Reuters said Tesla sales in the rest of the world surged more than a billion dollars to $1.83 billion. The car maker's revenue drop in the U.S market in Q3 is sharp in contrast to the 55 percent rise in the second quarter that ended in June.

According to analysts, Tesla’s sales growth in the U.S market will remain a challenge going forward.

“Musk & Co. are laser-focused on Europe and China for growth, while domestically, core demand is fading relative to other regions,” noted Wedbush analyst Dan Ives.

Federal credit factor behind lost sales

One possible reason for the steep fall in U.S sales for Q3 could be the fall in feral credit to the Elon Musk-led car maker.

Tesla’s July jumped 136.1 percent year over year. But sales started skidding in August, it fell 40.3 percent that month and then fell 16 percent in September.

According to analysts at Edmunds, Tesla’s Federal credit dropped from $3,750 through June 30, 2019, to $1,875. The impact of rerating Federal credit started possibly reflecting on the sales from August.

However, the Q3 earnings report released in early October had improved Tesla’s standing positively. Despite a nearly 8 percent drop in total revenue to $6.30 billion, the surprise was a quarterly profit and delivery record of 97,000 cars.

The results gave an impetus to Tesla stock that zoomed to a high in more than six years. On Tuesday, Tesla stock price was down nearly 3 percent at the Oct.29 trading.

Tesla Model 3 with bigger wheels spotted in China

Meanwhile, reports said a Tesla Model 3 prototype with a longer wheelbase was spotted in China – triggering rumors that Tesla is toying with that option.

Spy shots on Chinese social media showed a car with a longer wheelbase. However, the picture could not be taken as the final one as the seemingly longer form can be an aberration from the angle of the picture.

Rumor mills were speculating Tesla’s Gigafactory 3 in Shanghai will offer a longer wheelbase version of Tesla Model 3 for the Chinese market with the feature of a bigger backseat.

In China, even moderately affluent people drive a chauffeur, unlike other cultures where that luxury is reserved for the super-rich.

According to a report by Electrek, since Tesla CEO Elon Musk has already confirmed Tesla will make only lower-end versions of the Model 3 in Shanghai, this high-end chauffeur version with camouflage may not be from the Tesla stable.