Tesla's vehicle sales in China dropped sharply to 26,006 units in October, marking the weakest performance in three years. This decline, amid rising competition and reduced government incentives, contributed to a dip in the company's shares. The results follow poor sales in key European markets.
Tesla Inc. reported delivering 26,006 vehicles in China last month, according to data from the China Passenger Car Association via Reuters. This figure represents a 35.8% decrease from October 2024 and a significant slide from September's 71,525 units, when deliveries began for the Model Y L, a longer-wheelbase, six-seat version of Tesla's best-selling SUV tailored for the Chinese market.
The company's share of China's electric vehicle market fell to 3.2% in October, down from 8.7% the previous month and its lowest level in over three years. China remains Tesla's second-largest market after the United States in the third quarter. However, Tesla faces intensifying competition, notably from Xiaomi, which achieved record monthly sales of 48,654 units with models like the SU7 sedan and YU7 sport utility vehicle. Overall car sales in China also declined in October, influenced by weaker consumer sentiment following cuts to government subsidies and tax incentives.
Tesla's challenges in China echo difficulties in Europe, where sales were dismal in markets such as Germany, Spain, the Netherlands, and the Nordic region. News services also noted an increase in shipments from China to other markets, despite the domestic sales drop and declining market value in the country.
On Tuesday, Tesla shares traded lower, down 1.91% at $435.33, as investors reacted to the sales figures. Separately, Ark Invest, led by Cathie Wood, sold 5,426 Tesla shares across its ARK Innovation ETF and ARK Next Generation Internet ETF, totaling approximately $2.4 million at the prior closing price of $445.23. Recently, CEO Elon Musk emphasized Tesla's push toward semiconductor production independence, moving away from suppliers like Taiwan Semiconductor Manufacturing Co. to enhance AI capabilities.
