Tesla's China Sales Plunge: Can Musk's Electric Giant Rebound Amid Fierce Competition?

Author: Anusuya Lahiri | December 04, 2023 12:19pm

Tesla Inc's (NASDAQ:TSLA) sales of China-made electric vehicles (EVs) declined by 17.8% in November compared to last year, totaling 82,432 cars. 

This decrease marks the most significant drop since December 2022, when sales fell by 21% due to reduced production and price cuts in response to rising inventories and weakening demand. 

Despite the year-over-year decline, Tesla's deliveries of Model 3 and Model Y in China increased by 14.3% compared to October.

Also Read: Tesla Set To Expand Across India, Build $2B Factory, Elon Musk Expected To Visit

In contrast, Chinese rival BYD Co (OTC: BYDDF) (OTC: BYDDY) reported record deliveries of 301,378 vehicles in November, a slight increase from October and a substantial 31% rise from the previous year. 

BYD's Dynasty and Ocean series of EVs and petrol-electric hybrid models drove the growth, Reuters cites China Passenger Car Association (CPCA) data.

Tesla faces intense competition in China, the world's largest auto market. CEO Elon Musk continues to engage with Chinese leadership, including meeting with President Xi Jinping in November, where Xi expressed support for Tesla's operations in China. 

However, Tesla's market share in China's EV sector dropped to 5.78% in October from 8.7% in September amidst a price war and shifting consumer preferences towards more affordable plug-in hybrids. 

Tesla has increased its prices five times in China since late October due to the slowing growth in EV demand. Tesla's revenue from China climbed to over $18 billion in 2022, more than sixfold it generated in 2019.

Meanwhile, other companies like Li Auto Inc (NASDAQ: LI) and smartphone maker Xiaomi Corp (OTC: XIACF) (OTC: XIACY) are advancing in the EV market, with new models and production plans underway.

Price Action: TSLA shares traded lower by 1.55% at $235.14 on the last check Monday.

Posted In: BYDDF BYDDY LI TSLA XIACF XIACY