Tesla is experiencing significant challenges in China, its key market outside the United States. When Liu Jie, aged 32, decided to purchase an electric car in October, Tesla was among her top considerations. However, after test-driving several Chinese vehicles, she opted for a sports sedan from Xiaomi, known primarily for its smartphones, kettles, and robot vacuums.
“Xiaomi is more fashionable,” Ms. Liu remarked last week in Beijing. “Tesla, for me, it’s a little bit normal. You can see the Tesla Model Y everywhere.”
Consumers emphasize that it’s not personal. Tesla remains a leading brand, and its CEO, Elon Musk, is highly respected in China. The Chinese government warmly welcomed Musk when he inaugurated Tesla’s first overseas factory in Shanghai. Musk is credited with spurring China’s local electric vehicle industry.
However, the market has become fiercely competitive due to Chinese rivals. Chinese drivers who once favored Tesla are increasingly turning to local brands offering more efficient cars with advanced technology, often at half the price. Tesla’s primary competitor, BYD, sold 481,318 cars in the first two months of this year, a 75% increase from the same period last year. In contrast, Tesla sold 60,480 vehicles during the same timeframe, marking a 14% decline from last year.
— news from The New York Times