Tesla’s China Orders Witness Decline

In China, Tesla Inc’s (NASDAQ: TSLA) vehicle orders almost halved in May. This drastic decrease in the vehicle orders from April is the result of increased scrutiny by the government of China on Tesla. Tesla’s monthly orders were reduced to around 9,800 in China. This is more than in April that recorded 18,000 orders. This development hit the shares of the company. Tesla’s shares witnessed a drop of around 5%.

In April, the company sold 11,671 Model 3 & Model Y electric vehicles, while in March, it sold 35,478 units, according to CPCA. Tesla has many prominent competitors in China that include Nio Inc (NYSE: NIO), BYD, & Xpeng Inc (NYSE: XPEV).

China is Tesla’s second-biggest market globally after the U.S contributes around 30% of the company’s sales. The company manufactures various electric vehicles in its Shanghai plant that include Model 3 sedan vehicles. 

When the company erected its first overseas manufacturing unit in Shanghai in 2019, the government supported it. But the story is different now. Tesla is facing scrutiny for its failure to address customer complaints.

The Model 3 Sedans of the company were the go-to vehicles for the people of China, and that is why they were the top-selling vehicles in the country. However, the merger of General Motors & SAIC Motor that produces cheaper electric vehicles than Tesla replaced the company from the top.

History

In the previous month, many news agencies reported that at few government offices in China, the staff cannot park their cars of Tesla brand inside compounds owned by the government. This step is the backdrop of the fact that Tesla cars come with cameras that cause security issues.

To get things back on track, the company strives to enhance its relations with the Chinese regulators and the government. Tesla has set up a data center in the country. Through this data center, it is planning to store data locally. The company is also looking to open a data platform for its customers.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

Recent Stories

SignUp Now For Our Featured Newsletter