(CNN) – Tesla’s Chinese sales last month were much weaker than they originally appeared.
Although Tesla does not report monthly sales or regional revenue, the China Passenger Car Association estimated earlier this week that Tesla’s Chinese sales fell 27% from March to just under 26,000 cars, far worse than the overall decline. of 10% in China’s EV sales overall.
But that’s not the whole story: The trade group later clarified that its April figure includes sales of vehicles made in China but exported to other markets. More than half of the Teslas initially reported as Chinese sales (14,174) were exported.
That’s a potentially serious problem for Tesla, which opened its second car assembly plant in Shanghai in late 2019 specifically to serve the crucial Chinese market. China is the world’s largest market for car sales overall, and electric vehicles account for a much larger share of car sales than any other major market – around 4.5% in 2020, more than double that. the share of electric vehicles in the US car market last year.
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Tesla’s sales to Chinese buyers plummeted by more than 60% between March and April, according to independent Chinese EV analyst Zhu Yulong. Newly insured Tesla vehicles fell to just under 12,000 vehicles in April from around 34,500 in March, Yulong reported. Those numbers correspond closely to the number of non-exports from the CPCA in April and the total number in March.
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Why are Tesla sales plummeting in China?
Yulong believes that the drop in sales is due to the bad publicity Tesla has suffered in the Chinese market since early April.
Customers protested the company at China’s largest auto show in Shanghai last month, complaining about problems with their cars. The company also has five Chinese regulatory agencies that investigate the quality of its Shanghai-made Model 3 cars. Chinese media also reported that China’s military had banned Tesla vehicles from entering its complexes, expressing concern that onboard cameras could be used for spying, a charge that Tesla CEO Elon Musk has denied.
“Tesla has had really strong negative coverage recently. It has hurt their sales, ”Yulong wrote in a recent review.
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Critics of Tesla in the United States were quick to point out that the weaker sales numbers represent a sign of trouble for the automaker’s bottom line.
“Please note that the negative campaign by state-affiliated media within China regarding Tesla’s car quality did not begin until the end of April,” noted Gordon Johnson of GLJ Research, one of the harshest critics of Tesla. “So the impact (whatever it is) will probably not be seen until the sales figures for May / June 2021 are released.”
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Stocks falling
Tesla shares fell this week on concerns about its sales in China and a previous Reuters report that Tesla has decided not to buy land next to its Shanghai plant for possible future expansion.
The shares fell 2% on Tuesday when initial CPCA figures suggested a 27% drop in Chinese sales, and were down another 4% on Wednesday, although they were slightly higher in pre-market trading on Thursday.
A spectacular 743% increase in stock price in 2020 made Tesla one of the most valuable American companies of any kind and by far the most valuable automaker in the world, worth the equivalent of all six of the world’s automakers. bigger cars together.
But after continuing that streak in the first weeks of 2021, the stock peaked in late January after the company reported slightly disappointing fourth-quarter earnings. Tesla shares have lost a third of their value as of Wednesday’s close since their record close in late January, sending the shares into bear market territory.
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