Tesla China sales fall in July to lowest level of 2023

A Tesla store in Beijing in May.

Tesla Inc.’s China deliveries slumped in July to the lowest level this year, as the electric vehicle maker struggles to attract buyers despite price cuts and other incentives.

The company’s Shanghai plant delivered 64,285 cars last month, a 31.4 percent drop from June, according to preliminary data published by China’s Passenger Car Association on Thursday. The PCA doesn’t break down figures for local deliveries versus exports, but Tesla typically focuses on shipping overseas in the beginning of each quarter.

Tesla’s plant in Shanghai has capacity to produce 1.1 million EVs a year and accounts for more than half of the carmaker’s global output.

The company started a price war in China last year when it cut prices on the Model 3 and Model Y, prompting many of its increasingly powerful local competitors to do the same. The price reductions didn’t lead to a lasting bout of buying in China, which is struggling to lift economic growth following COVID.

Still, Chinese EV startups are seeing a recent increase in sales, with BYD Co. — the top-selling car brand — delivering 262,161 new energy vehicles in July. Xpeng Inc., which has signed a deal to produce EVs with Volkswagen Group, reported a 28 percent increase in sales from June to 11,008 units, while Li Auto Inc. shipped 34,134 cars in July and Nio Inc.’s deliveries jumped to 20,462

Tesla is offering shopping vouchers worth 3,000 yuan ($420) to new customers in Shanghai, in conjunction with a local government incentive program aimed at boosting consumption and the flagging economy.

The U.S. automaker is giving the vouchers to 3,000 customers who order and register one of its locally-built Model 3 or Model Y electric vehicles in August.

While falling under the local government’s wider program providing discounts on groceries, movies and in other areas, the vouchers are yet another offer from Tesla to customers in China, where competition is heating up, not least with BYD, which makes plug-in hybrids as well as fully-electric vehicles.

China is the world’s biggest car market and leader in EV sales — retail sales of new energy vehicles totaled 647,000 in July, the Passenger Car Association said Wednesday. Latest data show Tesla delivered 93,680 vehicles from its Shanghai factory in June, including 74,212 to the local market.

The bruising EV price war appeared to culminate about a month ago, when Tesla and 15 Chinese carmakers signed a pact that included a commitment to avoid “abnormal pricing practices.” That specific pledge was retracted soon after, but authorities urged the companies to follow rules encouraging fair competition.

Subsequently, Tesla said it would give new car buyers 3,500 yuan in cash and a free enhanced autopilot trial if they were referred by a Tesla owner. That incentive program remains in place, the company said when announcing its latest offer on shopping vouchers Wednesday.

Send us a letter

Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Please enter a valid email address.

Please enter your email address.

Please verify captcha.

Please select at least one newsletter to subscribe.

See more newsletter options at autonews.com/newsletters.You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.