Thread by @BradMunchen

1)$TSLA is struggling in China. May sales (c/o JL Warren) came out today and they were crap. Although a sudden surge in the X led to total S/X sales to jump by +67% YoY, Model 3 sales fell -18% vs April to only 1,903 units--the lowest M3 May sales level in $TSLA's major markets.

2) Model 3 inventory is high in China. While Tesla’s China website indicated “1 to 2 weeks” delivery time during April/May, one can now get a Model 3 delivered w/in “a few days”. This continues to point to the high possibility of the M3 being a "flop" in China.

3) 'Model 3 a flop in China?', you might ask. Look at the numbers for April/May by major region:

USA: 10,050-->13,950
EU: 3,708--> 2,889
CHINA: 2,325--> 1,903

(Actually, it appears to be a flop in EU too)

4) This extremely weak Model 3 print for May is not because of the lack of shipments. There were 2 more China-bound ships in Q2 vs Q1. And it's doubtful that Chinese are waiting for the locally made M3: it'll only be $3K cheaper due to Autopilot being free on the import.

5) Another negative: Model X sales surged by 2.6x over April levels to 682 units in May. In Europe X saw May sales jump by 2.2x vs April. There seems to be a liquidation of X inventory going on in both regions, which points to heavy discounting and margin deterioration in Q2.

6) BAIC's Senova was China's top-selling EV in May at 7,241; BYD's Yuan, 2nd at 6,044. At only 1,903 units in May, Model 3 dropped to 12th from 10th place in April. I predict $TSLA will have no choice but to lower the price of its locally made Model 3 by launch next year. $TSLAQ

Erratum: In 4) of this thread, I tweeted that there were 2 more ships in Q2 to China vs Q1. That was wrong. There were 8 ships to China in Q1 and only 6 in Q2. Apologies for the confusion.