Speculating:
With import tariffs in China falling and prices decreasing we should see a higher margin per car in that country combined with a stronger demand. That could help to achieve overall profitability quicker.
"A Tesla gallery in Shanghai has managed to sell out its entire Model X 75D inventory in 24 hours, after the Customs Tariff Commission under China’s cabinet announced that it would reduce car import duties from 20-25% to just 15% starting July 1. "
As all Models are supply constraint and S and X are not in production increase focus right now due to "all hands on deck for the 3" it would make business sense to ship as many S and X and sell them in China as possible.
Why? Well, first of all its likely a higher Margin in China for those cars so it makes sense to allocate them. Secondly China is the most attractive EV market due to government rules and incentives and every Tesla on the road will help to capture market share for the future. Third, the tax incentive in the US can be pushed further out with decreased allocation which is good for the demand on the long run in the US given that more people will benefit from the $7500 or later lower income tax deduction.
We may experience here a market prioritization that consumers may consider as unfair but to achieve profitability they should do it.
I wonder if other markets like US and Europe will get a lower allocation though.
Tesla's Shanghai gallery sells out entire Model X inventory in 24 hours
(And thanks.)
