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(Bloomberg) -- Tesla Inc.’s business in China is trending as though its best days in the world’s biggest electric vehicle market may be behind it.
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Elon Musk’s automaker has been backsliding in China for the past five consecutive months on a year-on-year basis, according to data from the country’s Passenger Car Association. Tesla’s shipments plunged 49% in February from a year earlier to just 30,688 vehicles, the lowest monthly figure since way back in July 2022, when it shipped just 28,217 EVs — and that was in the middle of Covid.
Tesla’s factory on the outskirts of Shanghai has had some of its production lines retooled for efficiency and to relaunch the popular Model Y, so it’s to be expected both that output dropped and will take some time to ramp back up. But even before that, the trend was heading in the wrong direction.
The chart above shows the market shares of the top 12 automakers in China by sales for any type of car — electric, hybrid or otherwise. Tesla, at No. 11, is well under 5%. Indeed, most carmakers’ trend lines are sloping down, not up, especially the international ones.
Then there’s BYD Co. The company, which stopped making cars powered entirely by internal combustion engines in March 2022, has a market share heading toward 15%. It sold more than 318,000 fully electric and hybrid passenger vehicles last month, up 161% year-on-year. The Shenzhen-based carmaker also notched another record month for overseas sales, which hit 67,025 units.
Its success is a major reason why Tesla is losing.
While Tesla sales in other parts of the world are cratering as Musk wades deeper into politics many find unsavory — sales in Germany plunged 76% to only 1,429 cars last month, even as overall EV registrations jumped — in China, disappointing shipments have more to do with a narrow and dated lineup, particularly in the face of up-to-date and more exciting offerings from BYD and others.
Year-end data place Tesla’s share of domestic sales at 2.6%, the lowest in 12 months, according to figures compiled by the China Automotive Technology and Research Center.
Morgan Stanley said in a note earlier this month that it expects Tesla’s China exposure “to continue to fall systematically.” While the country accounted for 21% of Tesla’s total revenues in 2024, analysts at the investment bank project by 2030, that will fall to around 6% to 7%.