Tesla’s China-Made EV Sales Drop 15% in May

The eighth consecutive month of declining China-made electric vehicle sales at Tesla reached 61,662 units during May as the market competition in China intensified while Elon Musk's political issues affected consumer trust.

The China Passenger Car Association reported May sales data which demonstrated Tesla's sales increased 5.5% from April but the company still experienced its eighth consecutive monthly sales decrease. The domestic Chinese car market presents a challenge for Tesla because its lineup cannot match the newer models from domestic competitors which sell at lower prices.

Tesla has launched two Chinese market incentives to boost sales: the company offers smart assisted driving transfers to new vehicle buyers until June and joins government-backed EV promotion programs in rural areas. The price reduction Tesla initiated in China last year has attracted more than 40 electric vehicle brands to the market.

The Chinese market decline at Tesla matches the European market decline because sales decreased during the previous month. The Model 3 and Model Y from Tesla face increasing competition from new entrants because of Musk's political activities which generate additional challenges for the brand.

The first quarter of the year showed Tesla maintained its position as the leading market in China despite ongoing market challenges. Tesla must quickly adjust its strategy because the intense price competition shows no signs of abating while the EV market in China continues to grow.