Tesla sales are slumping everywhere it meets Chinese competitors like BYD
The sales of Tesla vehicles in China have slumped to a low not seen since 2022. Despite the introduction of the exclusive six-seat Model Y L that initially proved popular, as well as new Model 3 or Model Y trims, in October Tesla only sold 26,006 vehicles in China.
This is the lowest monthly sales number for Tesla in three years, and a 36% year-in-year drop there. When Model Y L demand was raging in September, Tesla sold 63% more vehicles, indicating that interest in its six-seater has now waned after the first wave of early adopters was done with their purchase. Granted, Tesla exported 28% more vehicles from China than last October, but the overall export number is still down 8% for the year so far.
Besides the drastic increase in competition from local EV brands that offer cheaper vehicles with more options, Tesla has to grapple with the so-called EREV (Extended Range Electric Vehicle) trend in China, too. These not only come with huge batteries, but also tack on a gas-powered generator to alleviate range anxiety, and are proving so popular with consumers that even companies that started as pure electric plays are now making or considering EREVs.
In other markets where Tesla has to deal with the Chinese competition, its sales are slumping as well. The world's largest EV maker BYD is now breathing down its neck in Europe, where it sold seven times more cars than Tesla in the UK and four times more in Germany. These are the two largest market for plug-in vehicles there, indicating that the European trend to snub the Tesla brand because of Elon Musk's political activism exhibited earlier in the year is continuing unabated.
After the expiration of the federal tax credit in the US, Tesla is running numerous traditional APR financing, leasing, or free option upgrade deals. It has also introduced innovative new ways to drum up sales, such as the ability to rent a Tesla with free Supercharging and FSD included for a week at a price of just $60/day. A $250 purchase credit is then applied as a bonus if the customer decides to buy a Tesla after the 7-day testing period available at select stores. It remains to be seen if these incentives will be enough to stave off a sales slowdown in the US that will be similar to what is happening in markets where Tesla has to face its Chinese counterparts.
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