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Tesla Gains as China Sales Surge, Easing Concerns Over Beijing Scrutiny

Tesla's May China sales more than tripled from last year to 33,463 last, the China Passenger Car Association said Tuesday, easing concerns over recent scrutiny from Beijing.

Tesla  (TSLA) - Get Tesla Inc Report shares powered higher Tuesday after the clean energy carmarker saw a surge in China sales that eased concerns of near-term weakness in the world's biggest automotive market.

Tesla sold 33,463 Shanghai-made cars in the country last month, data from the China Passenger Car Association (CPCA) indicated Tuesday, up 29% from the April tally and more than three times ahead of last year's pandemic-hit total of just over 11,000.

CPCA added that new electric vehicle sales were up 177% from last year to 185,000, compared to a 1.1% can for overall passenger vehicle sales, which hit 1.66 million.

China is a crucial market for Tesla, accounting for just over a third of the 184,800 new cars the group delivered over the three months ending in March following the launch of its Shanghai gigafactory in 2019., a record total that included the production of 180,338 Model 3s and Model Ys.

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Tesla shares were marked 1.9% higher in early trading Tuesday to change hands at $616.70 each, a move that would peg the stock's year-to-date decline at around 14%.

Solid China sales also ease concerns that a broader crackdown on big tech companies, as well as renewed trade tensions between Washington and Beijing, would hold back Tesla's advance while powering China-based rivals such as Geely and Nio  (NIO) - Get NIO Inc. (China) Report

Last month, Tesla said it opened a data center in China that will store information generated from cars sold in the country following reports that officials in Beijing banned Tesla vehicles from military bases and housing compounds amid concerns concerns that potentially sensitive data from its onboard cameras could be collected and stored on Tesla servers.

The military ban also came amid a Reuters report that Geely, is preparing to unveil a range of newly-branded EV's that could challenge the Palo Alto, California-based group's dominance in the high-end market.