All eyes are going to be on the state of China's auto market this week as the China Passenger Car Association is slated to release final passenger vehicle sales data on Wednesday. But preliminary data shows sales of 1.24 units, down 43% from December. 

The decline is sequential can be attributed to some customers pulling forward demand in order to take advantage of subsidies before the end of the year.  

With regard to Tesla, the American EV manufacturer seemed to have bucked the trend thanks to price cuts. The company's China segment shipped 66,051 vehicles in January, according to Bloomberg, citing preliminary data released by China’s Passenger Car Association. In December, that number stood at 55,800.

The figure is up 18% from December, while China's new energy passenger vehicles, in total, are seen down 45% month over month from December to January. 

The company is now reportedly planning to increase output at its Shanghai plant - bringing its run rate back toward where it was in September 2022 - in order to continue meeting the demand from price cuts on its best selling models. 

Meanwhile, looking at the broader scope of EV sales in China, preliminary data we wrote about days ago showed domestic names like Nio, Xpeng and Li Auto all recorded monthly and YOY sales declines in January, per Jalopnik. 

SCMP reported this week: 

The report notes that almost all manufacturers suspended operations and sales during the Lunar New Year holiday, which ran from January 21 to January 27. 

Gao Shen, an independent analyst in Shanghai: “Apparently, Tesla’s huge discounts [on its Model 3 and Model Y vehicles] siphoned off drivers’ buying interest in the Chinese-developed smart EVs. Overall demand for expensive EVs appears to be weak, which could lead to price wars in the premium EV segment this year.”