American EV giant Tesla Inc (NASDAQ:TSLA) reportedly witnessed 16,200 insurance registrations in China last week, marking a jump of 12.5% from the week before, and its third-highest weekly registrations this year, despite increased competition from domestic automakers.

What Happened: For the week of September 2-8, Tesla saw its highest weekly insurance registrations since the third week of June when it witnessed 17,400 registrations, CnEVPost reported. Insurance registrations in China are considered a proxy for sales.

For the month of August, Tesla sold 63,456 vehicles in China, marking its best month this year, and up 37% from July, according to data from the China Passenger Car Association (CPCA).

Bull Weighs In: The surge in weekly insurance registrations has left Tesla Bull and The Future Fund managing partner Gary Black optimistic.

"With 3 weeks left in the quarter, TSLA China 3Q registrations are on track for their best quarter ever, and are +15% YoY and +25% QoQ," Black wrote on social media platform X.

$TSLA China posted a very strong 16.2K insured registrations for the week of Sept 2-8. This was TSLA China's 3rd highest weekly registrations this year. With 3 weeks left in the quarter, TSLA China 3Q registrations are on track for their best quarter ever, and are +15% YoY and... pic.twitter.com/1YSjOoybqx

— Gary Black (@garyblack00) September 10, 2024

Why It Matters: Earlier this week, Tesla CEO Elon Musk said that Tesla's gigafactory in Shanghai is running at maximum capacity. According to Tesla's second-quarter shareholder report, the gigafactory in Shanghai has an annual vehicle production capacity of over 950,000 vehicles, implying a daily maximum capacity of about 2,603 vehicles.

Tesla makes both the Model 3 sedan and the Model Y SUV at its gigafactory in Shanghai. The vehicles made at the factory are sold within China as well as exported to foreign markets including Europe.

Tesla also dismissed the impact of intense competition in China in its second-quarter earnings report in July and said, "While the automotive market in China remains among the most competitive globally, we feel that our cost structure and focus on core functionality that drives value for customers – including autonomy – position us well for the long-term."

Tesla, in China, is faced with heightened competition from domestic automakers who are introducing newer, lower-cost models at a rapid pace. Tesla has not introduced a new vehicle into the market since the Model Y SUV. The company started selling the Model Y in China in 2021 and has not introduced another model since.

However, the company is reportedly planning to produce a six-seat version of its Model Y SUV starting next year in the country. China is Tesla's second-largest market after the U.S.

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