China, the world’s largest electric vehicle market, is expected to see a slower growth rate in electric cars sales this year, spelling trouble for major players like Tesla and local competitor BYD. More than half of Tesla’s sales come from the communist country, adding more problems to the company which is the worst performing stock in the S&P 500 this year.
SHANGHAI, Jan. 7, 2020 — Tesla CEO Elon Musk poses with Tesla China-made Model 3 vehicle owners during a ceremony in Shanghai, east China, Jan. 7, 2020. Tesla, led by Elon Musk, has been struggling to keep up with its Chinese rivals’ aggressive price cuts. In 2023, the company slashed prices for its Model 3, S, X, and Y in China to compete with local brands like BYD, which offers much cheaper vehicles such as the $11,000 Seagull. Despite these efforts, Tesla lost its title as the world’s top EV seller for 2023 to BYD.
The slowdown in China’s EV market can be attributed to several factors, including the constant price cuts by local companies, which have irritated some potential buyers. Additionally, China’s economy has struggled since the end of the pandemic, with deflationary pressures and an ongoing property-market crisis dampening consumer spending.