Tesla Inc. (NASDAQ:TSLA) has received approval from the Chinese Ministry of Industry and Information Technology to sell its Model Y SUVs made at the Shanghai Giga factory. At the beginning of this month, the company started production capacity expansion at the factory.

Made in China Model Y SUVs available from 2021

The electric carmaker applied for permission to start selling the Shanghai-made Model Y SUVs in the country at the beginning of this month. The Model Y SUVs becomes the second car model out of the Shanghai factory after the Model 3 Sedan to be available to customers in China. The company started selling vehicles made in China in December last year. As of October, Tesla had delivered around 13,000 units.

Tesla expected the approval to start selling the new vehicle in one of the world’s fastest-growing electric car markets. Currently, the company has an edge in the Chinese electric vehicles market over rivals, and in 1H 2020, the company was the leading electric vehicle seller in the country. Tesla’s electric vehicle market share was 21% in 1 2020 compared to 6% in 2019. The company picked more market share after it began selling the China-made Model 3 EV in December 2019. Interestingly because domestically assembled cars are around 13% cheaper compared to those imported from the US.

Tesla faces competition in China

Around 19% of Tesla’s total revenue in the first nine months of 2020 was from China compared to 12% in 2019. Despite maintaining a dominant market position in China, the California-based EV-maker faces competition from electric vehicle companies taking advantage of the hype. For instance, Nio reported record vehicle deliveries in Q3 2020 with Li Autio and Zpeng, which recently debuted in the US exchanges and recorded strong sales in Q3 2020.

In Q3 2020, Tesla increased its vehicle production by around 76% compared to Q2 2020. This resulted from an increase in production in the Shanghai Giga factory, which was crucial in offsetting declines in production due to the California factory’s COVID-19 induced shutdown.