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Shares of Tesla (NASDAQ: TSLA) are trading lower on Tuesday. The company's stock had lost 7.5% as of 10:30 a.m. ET and as much as 8% earlier in the day. The drop comes as the S&P 500 lost 1.9%, and the Nasdaq Composite lost 2%.
The electric vehicle (EV) pioneer is seeing its sales in the critical Chinese market drop significantly.
Wholesale slump
Preliminary data from China's Passenger Car Association showed a precipitous drop in shipments from Tesla's factory in Shanghai for the month of February. The company delivered just 30,688 vehicles, down 49% year over year from last February's 60,172 vehicles. The figure is also down month over month with Tesla shipping 63,238 vehicles in January.
Tesla is falling further behind its rival, the Chinese EV maker BYD, which sold more than 318,000 vehicles in China last month, up 161% year over year.
It's not just China
While a drop in wholesale shipments could reflect strategic decisions not directly correlated to a drop in consumer sentiment, it's likely a major factor given what is happening in other markets. Tesla retail sales are cratering across Europe, despite growth in the broader EV market. The company's January sales were down 45% year over year. New data for February out of Nordic countries show a similar pattern, with sales down 42% in Sweden and 48% in Denmark.
Tesla is facing increased competition from EV makers like BYD as well as legacy car makers from Europe and Japan. It appears that the early dominance Tesla once enjoyed has eroded.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
Why Tesla Stock Is Plummeting Today was originally published by The Motley Fool