Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
Earlier this month, U.S. electric-vehicle maker Tesla began expanding the production capacity of its Shanghai Giga factory so it could start producing its Model Y vehicles there; now it has permission to sell the Model Y in China, too.
Chinese regulators at the Ministry of Industry and Information Technology on Monday granted Tesla official permission to sell its made-in-China Model Y series of sport utility vehicles in the country.
The Model Y SUV will be the second Tesla model to come out of Tesla’s Shanghai factory, after its Model 3 sedan. The Shanghai factory is slated to roll out its first Model Y cars in early 2021.
The Shanghai Giga factory—Tesla’s first production facility located outside the U.S.—kicked off production in October 2019 and delivered its first made-in-China Tesla cars, the Model 3 series, to Chinese customers last December. Tesla has since exported some of its Shanghai-made Model 3 cars to Europe.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
Tesla didn’t immediately respond to Fortune’s request for comment.
The regulatory approval was expected, but it gives Tesla the official go-ahead to sell a new vehicle to the world’s fast-growing electric vehicle market—a market where it already has a commanding lead over rivals.
In the first half of 2020, Tesla was the No. 1 EV-seller in China, which is also the world’s largest car market overall. Tesla’s share of China’s EV market was 21% during the first six months of 2020, compared with 6% a year earlier. Tesla picked up market share once it started selling its China-made vehicles in China in late 2019; the domestically produced vehicles were 13% cheaper for Chinese consumers than Teslas imported from the U.S.
In the first nine months of 2020, China accounted for 19% of Tesla’s revenue, compared with 12% for the same period of 2019.
Even with its dominant market share in the mainland, the California-based automaker faces growing competition from Chinese electric vehicle firms that are capitalizing on the Tesla hype.
Shanghai-based startup Nio reported record vehicle deliveries in the third quarter of 2020. Xpeng and Li Auto, which both debuted on U.S. exchanges this summer, also reported strong third-quarter sales figures.
Tesla’s shares soared earlier this month after it joined the S&P 500 stock market index of large U.S.-listed companies, and the electric-vehicle maker also reported record deliveries in its third-quarter results.
Tesla’s vehicle production in the third quarter increased around 76% compared with the second quarter of 2020, thanks to the firm’s Shanghai factory, which helped offset a drop in production caused by the coronavirus-induced closure of Tesla’s California plant.
