Tesla's car sales in China hit a 2024 record in August, according to recent reports, but the company is still losing market share to domestic rivals such as BYD.
luck Reports Elon Musk's Tesla has seen both good and bad things happen in the Chinese market this year. Although it recorded its highest monthly sales in 2024 in August, Tesla's market share in China's new energy vehicle (NEV) sector fell to just 6.5% in the first seven months of the year from about 9% a year ago, according to a report from Shanghai-based consultancy AutoMobility.
Despite the decline, Tesla CEO Elon Musk dismissed the report as “absurd” in a social media post and stressed that the company's Shanghai factory is operating at maximum capacity, but did not directly dispute the report's findings.
According to data from the China Passenger Car Association (CPCA), Tesla's Shanghai factory produced about 86,700 vehicles in August, of which about 23,250 were exported and the remaining 63,500 were sold domestically. This marked Tesla's best month in China so far this year, although domestic sales in the first eight months were flat at 388,000, down 1.9% from a year earlier, according to calculations by Chinese EV magazine CnEVPost.
China's NEV market, which includes pure electric cars as well as plug-in hybrids and hydrogen fuel cell vehicles, is expected to exceed 1 million units in August alone, a 42% year-on-year growth rate. But demand is shifting away from pure EVs, with Tesla rival BYD reporting that most of its sales growth is coming from plug-in hybrids. Tesla does not offer vehicles in this category, and had to cut production in April to ease pressure on unsold inventory.
Tesla's business is heavily dependent on exports from its Shanghai factory, which produces more than half of the world's Tesla vehicles, about one-third of which are for export. The factory has an annual production capacity of more than 950,000 Model 3 and Model Y vehicles combined, which translates to about 80,000 vehicles per month.
But Tesla's sales could now become collateral damage due to slowing economic growth and a backlash against Chinese electric vehicle makers that are expanding into overseas markets amid a fierce price war engineered by Musk himself. The EU recently imposed a 9% import tariff on Tesla's China-made cars as part of a broader crackdown on Chinese electric vehicle makers, while Canada has also implemented tariffs that make Tesla exports from Shanghai effectively prohibitively expensive.
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship.
