By Chen Lin

SINGAPORE (Reuters) – Tesla Inc, a company based in wealthy Singapore is enjoying a boom. Surging sales are threatening rivals’ market share.

It is no surprise that Tesla, the most basic Model 3, costs almost S$200,000 in Singapore ($148,300 in USA). This is largely because of a ownership levy. In the United States, it’s less than $40,000, but this is a testament to the firm’s rise in the global automotive industry.

This week, Tesla surpassed $1 trillion https://www.reuters.com/business/autos-transportation/hertz-orders-100000-tesla-cars-bloomberg-news-2021-10-25 in market value, overshadowing the combined value of five of its biggest rivals, Toyota Motor (NYSE:) Corp, Volkswagen AG (OTC:), Daimler AG (DE) Ford Motor (NYSE) Co. General Motors (NYSE)

According to data provided by Singapore’s Land Transport Authority, (LTA), the number of Teslas driving on Singapore roads increased more than tenfold, reaching 487 units in the third quarter from 30 during the first half.

Tim Shim (software engineer) said that he bought the Model 3 because he was a shareholder and supporter of the company. He reserved the Model 3 five-years ago, but it was only recently received as the sales started in the city.

Shim was one of the Tesla fanatics who helped make Tesla Singapore’s 6th most-popular car brand.

Experts don’t believe that there is one cause of the increase, but Singapore announced this year a S$45,000 subsidy available to buyers who purchase electric cars. Tesla may be capable of delivering more vehicles than its competitors because it seems that Tesla has done better at overcoming supply chain problems than most other companies.

The pent up demand for electric vehicles is high. “Now the supply is there and Tesla most likely is working through a huge backlog,” stated Niels de Boer at Nanyang Technological University, NTU.

Last month, 314 Teslas were registered in Singapore. This is almost as many as Hyundai’s and closely follows top brands Toyota Motor Corp.’s 778 or Honda Motor Corp.’s 466.

Tesla did not comment on Singapore’s performance.

The website states that new customers will still need to wait between 4-12 weeks for their car.

TESLA’S WIN IS OTHERS’ LOSS

Tesla’s gains in market share are due to Singapore’s tight limits on vehicle registrations, effective until 2025. The country is small and competitive. It runs approximately 50km (31 miles) east-to-south and 27km north to south.

According to a Reuters calculation, Daimler’s Mercedes-Benz (OTC) and Nissan registered fewer new cars per month in the third quarter. This is a drop of 45% and 27%, respectively, from the beginning half of the year.

While monthly vehicle registrations dropped by 15.8% in the last quarter, it was only Tesla and Korean automakers Hyundai and Kia that reversed the trends among the major vendors. Hyundai and Kia both reported sales increases of 13.6% and 25 percent, respectively.

According to industry professionals and analysts, recent factory disruptions due a global shortage of chip supplies may have also affected sales and delivery in recent months. Hyundai and Tesla are two of the handful of automakers that have done better than competitors in managing disruptions.

Andy Seo from Volvo said, “A Tesla car costs less to buy than comparable class sedans of other Western brands like Mercedes or BMW.” It costs around S$20-30 to fully charge a Model 3 at his house, he said.

NTU’s de Boer believes that the Tesla frenzy will fade over time as competition heats, but it may help increase adoption of electric cars (EVs).

He stated that Tesla “will help facilitate the shift” and said, “I believe Tesla will aid in the transition. This is purchasing an EV while remaining trendy.”

Tesla accounted for 1.4% of the 36,629 Singaporean new car registrations this year. This is in contrast to Toyota’s 20%.

Singapore, which Tesla CEO Elon Musk once criticised for not being supportive of EVs, plans to phase out all internal combustion engine vehicles https://www.reuters.com/article/us-singapore-economy-budget-autos-idUSKBN20C15D by 2040 and is encouraging drivers to switch to EVs through a range of measures, including more tax breaks and subsidies.

($1 = 1.3483 Singapore dollars)

Top brands vs Tesla’s performance in 2021 https://tmsnrt.rs/3jEF9SD

Top three car brands in Singapore vs Tesla (Jan-Sept 2021) https://tmsnrt.rs/31aMLpx

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