TSLA is gearing up to report its global second-quarter deliveries this weekend. Pointers are toward a record performance, with the electric vehicle maker’s key China market likely seeing marked strength. 

What Happened: Tesla’s second-quarter China sales may have increased 13% quarter-over-quarter to 155,000 units, said China Merchants Bank International Securities analyst Shi Ji, Reuters reported. 

This is despite Tesla’s China market share in the battery EV market likely shrinking from 16% in the first quarter to 13.7% in the second quarter, the analyst said. Other domestic players such as BYD Company Limited  

The number is in line with the 153,000-unit estimate provided by Deutsche Bank Securities, Reuters said. The firm expects Tesla to sell 448,000 units globally. 

Domestic rivals might have an upper hand over Tesla in China due to their expansion into lower-tiered cities, suggested Automotive Foresight managing director Yale Zhang, the report said. Tesla’s direct sales model could make expansion into these cities expensive, he added. 

Why It’s Important: China is a key market for Tesla, given about half of its total production comes from the country. The made-in-China vehicles are also cost-competitive due to their higher margins. 

Weekly vehicle insurance data reported Tuesday showed strong numbers for Tesla relative to domestic battery EV upstarts. 

In premarket trading on Wednesday, Tesla shares were up 2.12% at $19.03, according to Benzinga Pro data.