Tesla is losing in the world’s largest EV market
It’s almost unthinkable, but Tesla Inc., the company that comes to mind when most people think about electric vehicles, may have had its best days in China, the world’s biggest and most advanced EV market.
Elon Musk’s automaker has been backsliding in China for the past five consecutive months on a year-on-year basis, according to data from the country’s Passenger Car Association. Tesla’s shipments plunged 49% in February from a year earlier to just 30,688 vehicles, the lowest monthly figure since way back in July 2022, when it shipped just 28,217 EVs — and that was in the middle of Covid.
Tesla’s factory on the outskirts of Shanghai has had some of its production lines retooled for efficiency and to relaunch the popular Model Y, so it’s to be expected both that output dropped and will take some time to ramp back up. But even before that, the trend was heading in the wrong direction.
It shows the market shares of the top 12 automakers in China by sales for any type of car — electric, hybrid or otherwise. Tesla, at No. 11, is well under 5%. Indeed, most carmakers’ trend lines are sloping down, not up, especially the international ones.
But look at BYD Co. The company, which stopped making cars powered entirely by internal combustion engines in March 2022, has a market share heading toward 15%. It sold more than 318,000 fully electric and hybrid passenger vehicles last month, up 161% year-on-year. The Shenzhen-based carmaker also notched another record month for overseas sales, which hit 67,025 units.
Its success is a major reason why Tesla is losing.
While Tesla sales in other parts of the world are cratering as Musk wades deeper into politics many find unsavory — sales in Germany plunged 76% to only 1,429 cars last month, even as overall EV registrations jumped — in China, disappointing shipments have more to do with a narrow and dated lineup, particularly in the face of up-to-date and more exciting offerings from BYD and others. [Continue reading…]
Tesla’s inventory has piled up so high that you can see lots crammed full of their unsold cars from space. This is despite ever more customer incentives including discounted leases, free charging, and zero percent financing. This week, posts from the official Tesla North America account on X offering either zero percent APR or $0 due at signing on all Model 3 trims provoked speculation that the company has grown desperate to move product.
During this slowdown, Tesla was pouring resources into the production of Cybertrucks, which were met with open mockery upon first deliveries in 2023 for their unorthodox construction and pronounced defects. Since this release coincided with Musk’s ongoing descent into toxic Trumpism — and in part because they are widely regarded as ultra-expensive eyesores — the vehicles have attracted special contempt. There are web forums exclusively devoted to making fun of the trucks and their typically defensive owners.
Beset by countless production quality problems and malfunctions, the Cybertruck was recalled six times last year. Its poor design convinced many of Musk’s hubris and out-of-touch ideas. With sales drying up, Tesla has resorted to offering free charging to customers who buy a version of the EV that starts at $95,000. Short of a miracle, the truck will remain a striking, high-profile disaster at a time when Tesla could ill afford it. [Continue reading…]