Tesla China sales plummet as competition intensifies
Worry over the automaker's sales in the world's largest auto market is one reason shares fell.
Tesla's sales in China, the world's largest auto market and a crucial part of the company's fortunes, fell in late 2022 as domestic manufacturers like BYD were gaining ground with low-cost electric vehicles, data showed Thursday.
Tesla sold about 56,000 cars in China last month, down 21 % compared to the previous year and 44% compared to the previous month. For the full year, Tesla's Chinese sales rose nearly 50%, according to data released by the China Passenger Car Association.
China accounts for about 40% of Tesla's sales. Concerns about the automaker's performance were a big factor in Tesla's stock price precipitously falling last year. The company's shares closed down around 3% on Thursday.
Tesla has seen rapid growth in China, but faces increasingly fierce competition from the share of companies like BYD, which sells well-known cars at lower prices and is the nation's No. 1 electric vehicle brand. BYD sales, including hybrid vehicles, more than doubled in December from a year earlier and were up 2% in December from November, according to data from the Passenger Car Association.
China is considered key to Tesla's global ambitions. Unlike the United States and Europe, overall auto sales continue to rise as many people do not own a car or only own one vehicle. The Chinese government has strongly encouraged the ownership of electric vehicles as a solution to urban air pollution, although it has recently cut subsidies.
"When you're not not active in the biggest market in the world, you're nowhere,” said Axel Schmidt, Accenture's senior managing director who oversees the consultancy firm's automotive division, ahead of the release of sales figures.
Tesla's factory in Shanghai is considered one of the company's most efficient factories and supplies cars to Europe and other parts of Asia in addition to China. Figures released Thursday include exports. The Shanghai plant was forced to close several times in 2022 due to supply chain issues and pandemic shutdowns.
China is in the midst of a pandemic crisis that after the government abandoned its 'zero Covid' policy in the face of public protests, the lifting of draconian quarantine and lockdown measures and rising cases.
Tesla's sales decline should be seen "against the backdrop of the massive Covid outbreak" in December, Gary Black, managing partner of the Future Fund, an investment firm that owns Tesla stock, said on Twitter.
Overall, sales of hybrids and battery-only cars in China were flat in December compared with November, the association said. its products in China. The company slashed prices for the Model Y and Model 3, the two vehicles it manufactures in Shanghai. The company's website says vehicles can be delivered in as little as a week - last year expectations stretched to months.
Analysts say Tesla could be vulnerable to political tensions between the United States and China. Elon Musk, the company's chief executive, has courted the Chinese government, suggesting, for example, that Taiwan become a special administrative area of China to cede more control to Beijing. Taiwan refuses to cede any control to China or jeopardize its independence, and Mr Musk's remark has angered leaders in Taipei.
Worry over the automaker's sales in the world's largest auto market is one reason shares fell.
Tesla's sales in China, the world's largest auto market and a crucial part of the company's fortunes, fell in late 2022 as domestic manufacturers like BYD were gaining ground with low-cost electric vehicles, data showed Thursday.
Tesla sold about 56,000 cars in China last month, down 21 % compared to the previous year and 44% compared to the previous month. For the full year, Tesla's Chinese sales rose nearly 50%, according to data released by the China Passenger Car Association.
China accounts for about 40% of Tesla's sales. Concerns about the automaker's performance were a big factor in Tesla's stock price precipitously falling last year. The company's shares closed down around 3% on Thursday.
Tesla has seen rapid growth in China, but faces increasingly fierce competition from the share of companies like BYD, which sells well-known cars at lower prices and is the nation's No. 1 electric vehicle brand. BYD sales, including hybrid vehicles, more than doubled in December from a year earlier and were up 2% in December from November, according to data from the Passenger Car Association.
China is considered key to Tesla's global ambitions. Unlike the United States and Europe, overall auto sales continue to rise as many people do not own a car or only own one vehicle. The Chinese government has strongly encouraged the ownership of electric vehicles as a solution to urban air pollution, although it has recently cut subsidies.
"When you're not not active in the biggest market in the world, you're nowhere,” said Axel Schmidt, Accenture's senior managing director who oversees the consultancy firm's automotive division, ahead of the release of sales figures.
Tesla's factory in Shanghai is considered one of the company's most efficient factories and supplies cars to Europe and other parts of Asia in addition to China. Figures released Thursday include exports. The Shanghai plant was forced to close several times in 2022 due to supply chain issues and pandemic shutdowns.
China is in the midst of a pandemic crisis that after the government abandoned its 'zero Covid' policy in the face of public protests, the lifting of draconian quarantine and lockdown measures and rising cases.
Tesla's sales decline should be seen "against the backdrop of the massive Covid outbreak" in December, Gary Black, managing partner of the Future Fund, an investment firm that owns Tesla stock, said on Twitter.
Overall, sales of hybrids and battery-only cars in China were flat in December compared with November, the association said. its products in China. The company slashed prices for the Model Y and Model 3, the two vehicles it manufactures in Shanghai. The company's website says vehicles can be delivered in as little as a week - last year expectations stretched to months.
Analysts say Tesla could be vulnerable to political tensions between the United States and China. Elon Musk, the company's chief executive, has courted the Chinese government, suggesting, for example, that Taiwan become a special administrative area of China to cede more control to Beijing. Taiwan refuses to cede any control to China or jeopardize its independence, and Mr Musk's remark has angered leaders in Taipei.
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