Tesla’s Market Share Declines in China and Worldwide, Disappointing Investors | Global News

Tesla Inc. is facing challenges not only on a global scale but also in China, the world’s largest automotive market. The electric vehicle maker’s market share in China has been steadily declining, dropping from 10.5 percent in the first quarter of 2023 to around 6.7 percent in the quarter ended in December, according to data from the country’s Passenger Car Association.

The competition in China’s EV market has intensified, with local rivals like BYD Co., Nio Inc., Xpeng Inc., Li Auto Inc., and even smartphone maker Xiaomi Corp. unveiling new and exciting models packed with high-tech features. Tesla, on the other hand, has been relying on its older models, the Model 3 sedan and the Model Y SUV, which were first introduced before 2020 and have seen only minor updates since.

Price cuts, which used to be a sales booster for Tesla, are no longer as effective as Chinese automakers have joined the price war initiated by Tesla. The growth in China’s EV market is also slowing down, with new-energy vehicle shipments projected to increase by 25 percent this year, down from 36 percent in 2023 and 96 percent in 2022.

Tesla was forced to trim production at its Shanghai factory as shipments declined in the first two months of 2024 compared to the same period last year. The company delivered an estimated 89,064 vehicles in China in March, up from the previous month but still facing challenges in meeting expectations.

Overall, Tesla’s global delivery numbers for the first quarter fell short of expectations, marking one of the most challenging periods for Elon Musk and the company in recent years, according to analysts. The company is now facing the task of regaining its footing in China and globally amidst increasing competition and changing market dynamics.