After the difficulties in Europe, Tesla Takes Another Crash in China, Too. According to the Passenger Car Association, the shipments of Elon Musk's electric cars are fell 49% in February, stopping at just 30.688 units. A number that had not been seen since July 2022, when Covid-19 had blocked everything. And it doesn't end there: this is the Tesla's fifth consecutive month of decline in the Asian giant, the world's largest market for electric vehicles.
A weigh on Chinese performance Tesla's move is not only the reorganization of the Shanghai factory to relaunch the Model Y, but also thefierce competition from local brands, first and foremost Byd. In February, in fact, Tesla slipped to 11th place among the major automotive manufacturers in China, with a market share less than 5%, while the Shenzhen-based company continues to grow, consolidating its position with a 15% share.
And so, the Tesla stock continues to suffer on the stock market, with a drop of more than 6% in the pre-market, followed by a another drop at the opening today on Wall Street.
The challenge with Byd
BYD continues to gain ground in the automotive market thanks to a winning mix of competitive prices, an ever-widening offer and constant technological updating. In February, the Shenzhen giant has sold over 318.000 vehicles between electric and hybrid, recording an impressive increase of 161% compared to the previous year. Much of this success is due to the highly competitive pricing strategy: A Tesla Model Y costs an average of $33.500, while BYD's Song Plus starts at just $21.000. Even more aggressive is the oSeagull city car offer, available for less than $10.000 and already sold in over 82.000 units by 2025.
But competition is not just about price. Tesla recently updated in China the Full Self-Driving Software (FSD), but the package costs $8.800 and still does not guarantee optimal performance on local roads. BYD, on the other hand, aims to make the Advanced assisted driving accessible to all, including its God's Eye system even on the most affordable models.
In the meantime, to boost sales, Elon Musk has launched the new Tesla Model Y (Juniper), which has already collected 200 thousand reservations and over 6 thousand deliveries since February 26. The model is available in two versions: the rear-wheel drive, with a base price of 263.500 yuan (about 36.600 euros), and the long-range version with all-wheel drive, which starts at 303.500 yuan (about 38.600 euros at the current exchange rate). Since March, the American company has also introduced a Model Y standard at the same price, but without the extended warranty of the higher versions.
Tesla's prospects in China will also depend from the future of the Cybertruck, which Musk would like to bring to market within the year. The model, in fact, in the Land of the Dragon is not yet available due to the challenges of homologation and local regulations.
Musk's choices weigh on Tesla's collapse
Tesla's decline is not limited to the Chinese market. Since the beginning of the year, the stock has lost 35% of its value, falling from the high of $488 recorded in December to the current $225,40. This is a collapse that has led to burn about 700 billion dollars of capitalization, reducing it from a peak of 1.500 billion to 844 billion. And the blame for this decline, according to analysts, is not only to be attributed to the growing competition and the decline in sales, but also to Elon Musk's choices. His involvement in political issues and the promotion of the Doge (Department of Government Efficiency) have raised Concerns among investors and consumers. In Germany, for example, Musk's support for the right-wing AfD may have contributed to the collapse of 76% of sales recorded in February.
Tesla, Morgan Stanley's Predictions: Black Future in China
Morgan Stanley sent out a signalTesla Revenues in China Market AlarmAccording to the investment bank, theImpact of Chinese sales on the overall turnover of Elon Musk's company is destined to progressively decrease, going from 21% in 2024 to less than 7% by 2030. To avoid this contraction, Tesla will have to adopt a more aggressive strategy on prices and strengthen integration with the local technology ecosystem. Without these countermeasures, the its presence in China risks being drastically reduced.
Not everyone, however, is pessimistic. Wedbush, an analysis firm historically close to the tycoon, believes that Tesla still has huge potential, especially if he knows capitalize on its ambitionsin the AI field, from autonomous taxis to humanoid robots. But to regain the trust of investors, the company will have to demonstrate that innovation remains its strong point and that its founder has not lost interest in the project.
