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Tesla recently submitted a document to the Securities and Exchange Commission (SEC) showing that Tesla achieved sales revenue of US $1.4 billion in China in the second quarter of this year, up 102.9% year-on-year, and became the world's second largest market after the US market, accounting for 23.19% of total revenue, compared with only 11% in the same period last year.

Tesla achieved revenue of $6.04 billion, down 4.9% from $6.35 billion a year earlier, but it was the company's first four consecutive quarters of profit, with net profit of $104 million in the second quarter, according to Tesla's second-quarter earnings report released Wednesday.

According to Tesla's filing with the SEC, revenue growth was achieved only in China, with Tesla's sales revenue in the United States falling 11.20% year-on-year to just $3.09 billion, accounting for 51.19% of Tesla's second-quarter revenue. Sales revenue in other markets such as Norway and the Netherlands was US $1.546 billion, down 29.08% from last year. It can be seen that Tesla's performance in the global market this year is still due to the huge contribution of the Chinese market.

During the second quarter, production and delivery at Tesla's Fremont plant in the United States were shut down for nearly 50 days as a result of the New Crown epidemic, resulting in a decline in Tesla's sales revenue in the United States. Tesla's Shanghai superplant in China, by contrast, contributed huge sales to its second quarter.

Tesla delivered 31,000 vehicles in China in the second quarter, accounting for 30 percent of its global sales, according to the association. In an effort to boost production capacity, Tesla also said in its first-quarter earnings report that it would raise the Shanghai plant's planned annual target of 150,000 vehicles to 200,000, or 4000 vehicles per week, while accelerating production of long-endurance and high-performance versions of the Model 3.

In addition to the Chinese market, the markets in the United States, Europe and other regions are still disturbed by the epidemic, with sales and revenue falling year-on-year. Tesla delivered 90,650 new vehicles in the last quarter, up 2.55% month-on-month and down 4.8% year-on-year, according to data released by Tesla.

Of course, Tesla's revenue decline under the epidemic was small, not only due to sales growth in China, but also to higher gross margins. Tesla reported a gross profit margin of 21% and a gross profit margin of 25.4% per vehicle during the reporting period, up from 18.9% in the same period last year, according to earnings data. Operating expenses were $940 million, down 13.7% from $1.089 billion in the same period last year.

According to industry analysis, the improvement of gross profit margin is due to the completion of Tesla Shanghai factory and the completion of domestic Model 3DE delivery. Therefore, in the Chinese market, the reduction of cost, operation and other expenses to a certain extent helps Tesla's net profit to be positive at the time of epidemic.

In addition to the domestic Model 3, Musk YE said that the production line of Model Y at the Shanghai plant is under construction as planned and is expected to deliver the first batch in 2021. The speed of recovery and profitability of the Shanghai Super Factory also led Musk to decide to build more factories to meet the huge potential demand for different models.

In any case, the Chinese market has now become Tesla's second largest market, and with the increase in production capacity at the Shanghai plant and the introduction of the new Model Y, Tesla's future sales in China will also be boosted. Tesla CEO Musk previously said that the local procurement of parts at the Shanghai factory will increase by 5-10% per month, and the parts yield will reach 80% or even higher by the end of this year, when the starting price of new cars may be lowered to achieve more consumer choice in China.

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