Tesla’s China Orders Halved in May Amid Regulatory Pressure and Public Relations Crisis, Report Says
Tesla’s vehicle orders in China dropped by almost half in May compared with the previous month, as the US automaker wrestles with backlash from regulators and customers alike in the world’s largest electric vehicle (EV) market, according to tech media outlet The Information.
The EV pioneer’s monthly net orders in China slumped to about 9,800 in May from more than 18,000 in April, the San Francisco-based tech news company reported, citing an internal source with knowledge of the data.
The report has cast doubts on Tesla’s “vaunted position and success” in the world’s largest automotive market, and sent the company’s stock on a 5.3% slide on Thursday – now down more than 30% from its late January peak.
The shares also slided as Tesla is recalling a total of 734 units of its 2019 Model 3 sedans imported to China, due to seat belt and tire-related problems, the country’s top market regulator said on Thursday. Separately, the carmaker initiated two new recalls on Thursday over potential seat belt issues affecting up to 7,696 vehicles in the US.
Tesla did not immediately respond to Pandaily’s request for comment.
Tesla’s global market share dropped precipitously to 11% in April from 29% in March, almost the lowest level since January 2019, according to Dan Levy, an analyst at Credit Suisse. Levy added that the company lost ground in China, Europe and the US, where its edge has been undermined by competition from rivals and recent price hikes.
Tesla’s China woes have continued to pick up steam as domestic regulators increase their scrutiny of the company and negative media reports regarding its product quality and customer service are mounting.
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In February, a group of national regulators summoned Tesla over safety and quality issues, citing a range of complaints about abnormal acceleration and battery fires. Tesla responded that it would strengthen its self-inspection and internal management.
However, news of traffic accidents involving Tesla vehicles have gone viral on Chinese social media in recent months after an angry customer created one of the company’s biggest public relations storms by climbing atop a Tesla car at the Shanghai Auto Show in April to protest the automaker’s alleged brake failures. Following the incident, the state-backed Global Times branded Tesla as “arrogant,” and the Chinese government’s central disciplinary commission issued a warning statement to the company.
Tesla’s total China sales also plummeted in April. According to data released by China Automotive Information Net, 11,949 China-built Tesla cars were registered domestically in April, a sharp fall from a record 34,714 registrations in March.
In 2019, Tesla became the first foreign car manufacturer to operate a wholly-owned factory in China with the opening of its Shanghai plant. The US carmaker began delivering China-made Model 3 vehicles to customers last year, and China-made Model Y cars this year.
China is currently the company’s second largest market globally. Last year, Tesla sold 120,000 units in the country, accounting for about 30% of its total 2020 deliveries. Tesla’s Model 3 sedans, once the best-selling EV in mainland China, were recently overtaken by a budget car called the Wuling Hongguang Mini EV, according to data from China’s Passenger Car Association.