Tesla is losing market share in China, with May sales down 30% year-on-year, despite overall demand for electric vehicles there rising. Meanwhile, Chinese rivals BYD and Xiaomi are growing strongly and dominating the market.
The special support that the Chinese government previously gave Elon Musk and Tesla is gradually disappearing. Domestic models integrate more features and richer entertainment applications, making Tesla less attractive to domestic consumers.
MAIN CONTENT
Tesla has seen a sharp decline in market share and sales in China due to its failure to meet local customer needs.
Competitors like BYD control 29% of the market share thanks to diverse products, rich features, and competitive prices.
Elon Musk faces challenges in relations with China and technological barriers, causing Tesla to lose momentum in the electric car and robotics playground.
Why is Tesla losing market share in China while the electric car market is still growing?
Data from the Wall Street Journal shows that Tesla's sales in China fell 30% in May 2024 compared to the same period in 2023, selling nearly 40,000 vehicles, while domestic brands such as BYD continued to outperform with a 29% market share. This reflects the gap between customer demand and Tesla's ability to meet it.
Tesla’s failure to update its entertainment features and integrate local apps has caused many Chinese users to switch to domestic cars. BYD and Xiaomi models come with many new technologies such as multi-function screens, selfie cameras, and even in-car refrigerators, creating a superior competitive advantage.
Why were market feedback and suggestions from Tesla China team ignored?
Tesla’s China team has been submitting proposals for new features, app support, and smartphone integration to meet the domestic market since 2021. However, the US headquarters considers these improvements not a priority.
Tesla in the United States prioritizes developing self-driving technology and operational efficiency over local entertainment features.
Tesla China Director (2023)
Instead of adding a variety of domestic applications, Tesla only added Mango TV but still lags far behind its competitors in the entertainment sector. This makes Tesla products unable to keep up with Chinese customers' tastes, reducing their appeal and affecting business results.
What are the challenges in the relationship between Elon Musk and the Chinese government?
Relations between Elon Musk and Chinese officials have deteriorated sharply after he failed to use his role as a diplomatic bridge between the United States and China during a meeting with Vice President Han Zheng in January 2024. Tesla is no longer considered a “national treasure” as it once was.
We expected Elon Musk to contribute to improving US-China relations, but that has not been achieved as expected.
Chinese Vice President Han Zheng, January 2024
In addition, Tesla cannot deploy its Full Self-Driving (FSD) system in China due to the requirement that training data be processed domestically, while the company is facing chip difficulties due to US export controls.
Why is Tesla losing the technology and robotaxi race in China?
While Tesla has halted FSD development due to legal and technological issues, Chinese competitors such as XPeng, BYD, Baidu, Pony AI have launched vehicles with similar self-driving capabilities and operated actual robotaxi.
In February 2024, Tesla attempted to develop FSD via a software update, but was opposed and blocked by the government shortly thereafter. Chinese competitors quickly seized the opportunity to expand their market share and demonstrate their superiority in the field of autonomous electric vehicle technology.
What is the current status of Tesla's battery and robot production in China?
While Tesla will start exporting Megapack batteries from its Shanghai factory to Australia in 2024, it still cannot compete with CATL, China’s leading battery maker, which has a much deeper market.
For Optimus robots, while relying on Chinese components to reduce costs, Tesla is seeing domestic startups like Unitree and Agibot partnering with similar suppliers, creating an increasingly competitive ecosystem.
“Once the contract with Tesla is signed, it will be easier for domestic companies to cooperate with the supplier. This puts Tesla in a position to confront the competitors it helped develop,” said Chen Feng, marketing manager at a Tesla supplier.
Comparison of market share and features of electric vehicle brands in China (2024)
Brand EV & Plug-in Hybrid Market Share Key Features Starting Price (USD) BYD 29% Multi-screen, gaming, selfie camera, in-car refrigerator $26,400 (Sealion 07) Tesla 4% Limited integration, few entertainment apps, no robotaxi $36,700 (Model Y low-cost variant)
Frequently Asked Questions
Why did Tesla's sales plummet in China? Because Tesla failed to meet the needs of diverse features and local application integration, while domestic competitors are growing. Can Tesla regain market share in China? Tesla needs to improve its products to suit the market, strengthen local cooperation, and overcome legal barriers to new technology. Does Elon Musk still have influence in China? What advantages do Tesla's competitors have in China? The competitors win by integrating more entertainment features, advanced self-driving technology, and more competitive costs. Why can't Tesla deploy FSD in China? AI training data must be processed in China, while Tesla is facing difficulties due to US chip export controls.
Source: https://tintucbitcoin.com/tesla-trung-quoc-mat-da-tang/
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