Tesla’s stock (TSLA) took a hit in pre-market trading, plunging by as much as 4%, following new vehicle registration statistics from China.
The world’s largest electric vehicle (EV) market revealed that Tesla sold approximately 15,300 vehicles in the previous year, a stark contrast to the 98,800 units delivered in the first quarter of 2024, indicating a concerning decline in sales momentum.
Despite the dip in sales figures, Tesla has made strides in ramping up production of the Model Y, increasing output from roughly 7,000 units just four weeks ago to 15,000 today.
Tesla has made strides in ramping up production of the Model Y
However, the glimmer of improved production is overshadowed by waning demand for the Model Y Rear-Wheel Drive (RWD), which is now facing weak consumer interest. The current delivery timeline for this model is a mere 2-4 weeks, reflecting a troubling drop in enthusiasm from potential buyers.
In a bid to stimulate demand, Tesla recently reintroduced 0% financing options just weeks after unveiling a new version of the Model Y, suggesting underlying issues with the vehicle’s market appeal.
Although increasing prices on select models might seem like a sign of growing demand, it appears to be a misunderstanding of Tesla’s position in the competitive Chinese market, where the RWD model constitutes about 90% of sales.
As if struggling sales weren’t enough, Tesla now faces intensifying competition from domestic rivals such as BYD and NIO. The rapidly evolving EV landscape includes the recent launch of BYD’s ‘Super-E’ platform, which promises record-fast charging.
Today, CATL, Tesla’s primary battery supplier in China, also announced a partnership with NIO, further complicating Tesla’s dominance in this critical market.