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Tesla is starting to recover in China and sales are recovering sharply.

Hong Kong (CNN Business) After a miserable couple of months in ChinaTeslaPosted a sharp recovery in June sales in the most important international markets.

The world's second-largest economy has begun to relax Covid-related regulations after months of blockades in major cities, striving to increase car sales to support growth. It has increased rapidly.

According to a tentative estimate released by the China Passenger Vehicle Association (CPCA) on Wednesday, US electric car makers sold about 78,000 Shanghai-made vehicles last month, an increase of 142% from May. did. CPCA added that June sales were up 135% from a year ago. According to a statement earlier this week,

BYD,Warren Buffett-backed Chinese EV makersold 69,544 fully electric vehicles last month, shortly after Tesla. I was chasing.

Tesla's Chinese car sales were strong earlier this year, placing automakers at number one among pure electric brands. In March, we delivered 65,814 vehicles from our Shanghai plant, most of which were sold in the Chinese market. That number has increased by 85% from a year ago.

That was before authorities closedShanghai for two monthsto contain the worst Covid outbreaks in the city. Tesla's factory in Shanghai was closed for several weeks in April. Due to the difficulty in obtaining parts from suppliers, the company's production remained limited even after the plan was resumed.
Tesla sales in Aprilfell 98% fromin March to 1,512 units. In May, deliveries recovered to 32,165, well below the levels reached earlier this year.
BYD, whileescaped the country's exhaustive lockdown. In April, BYD dominated the market, selling a record high of 106,000 New Energy Vehicles (NEVs), an increase of more than 300% year-on-year. Of them, 54% were completely electric and the rest were plug-in hybrids. In May, BYD's NEV sales continued to grow, surpassing 114,000 units.
Analystattributed the resilience of BYD's sales to a "vertically integrated supply chain." This business model made BYD less vulnerable to supply chain disruptions during lockdown, but rivals needed to reduce productiondue to lack of chips and batteries.
The entire Chinese automotive marketslowedin April and May as severe lockdowns hit vehicle production and hindered sales. The market is now starting to pick up as the country is gradually reopening.

Initial estimates by CPCA on Wednesday showed that passenger car sales in June were up 22% from a year ago, reversing the 17% decline in May.

Tesla is also accelerating production at its Shanghai plant. In a statement last week, the company said the problems Tesla faced in the first few months of the quarter are now almost behind.

"Despite ongoing supply chain challenges and factory closures beyond our control, June 2022 was the best vehicle production month in Tesla's history." It said.

Covid's lockdown has hit the economy and boosted the unemployment rate, so Chinese authorities are rushing to boost growth.

The Ministry of Commerce announced on Thursday that the government is considering extending the tax exemption for electric vehicles.

Beijing has exempted NEV buyers from paying a 10% purchase tax since September 2014. However, that policy will end atat the end of this year.

— CNN's Chris Isidore contributed to this report.