Tesla Is in Serious Trouble in China
But thanks to a surge in far more price-competitive and lucrative offerings from Chinese EV manufacturers like BYD, Tesla's woes look poised to metastasize there as well. Its market share in China is shrinking, the Wall Street Journal reports, which could represent yet another nail in Elon Musk's carmaker's coffin.
The company sold 40,000 fewer cars in China in May, a massive 30 percent drop from the same month last year, a familiar story that's been playing out in many other parts of the world.
Then there's Musk's highly damaging embrace of far-right ideologies, which have iced over the brand's popularity in huge swaths of the world.
"Tesla remains important for China," a consultant for Chinese officials told the WSJ. "But for authorities, helping domestic companies still matters more."
While "you never want to bet against Elon Musk and the resilience of Tesla," Musk is "probably closer to sunset than sun up in his business in China," former General Motors exec Michael Dunne added.
Tesla could soon end up suffering the same fate as many other American tech companies, including Motorola and Apple, which once enjoyed enormous success in China — only to be lapped by better tech and domestically oriented regulations.
"Teslas are almost like iPhones now," 34-year-old Qian Yang, who sold his Tesla Model 3 in favor of a Xiaomi SU7 EV, told the WSJ. "They're getting uninspired and stale, and don't have revolutionary features anymore."
Tesla has also been facing steep regulatory hurdles getting its controversial and misleadingly-named "Full Self-Driving" driver assistance software approved in China. Beijing has yet to issue full approval, giving Chinese companies more time to catch up.
However, that hasn't stopped the Musk-led company from rolling out the software anyway, per the WSJ, which has angered officials there.
Musk has also reportedly ditched plans for a new car design that would be more amenable to Chinese consumers, instead focusing the company's efforts on cutting corners to save costs.
The trend couldn't come at a worse time for Tesla, which has been feeling the hurt under Musk's absentee leadership. His most recent promise to create a third US political party — months after promising he was done with politics for good — has spooked investors, wiping out tens of billions of dollars in market cap.
To experts, Musk simply didn't play his cards right, failing to predict Tesla could easily be overlapped in its second most important market. Even the company's Optimus humanoid robot — which Musk sees as Tesla's future alongside robotaxis — already has some intense competition in China, despite being many years from hitting markets.
"He made the same mistake that every foreign automaker made — to underestimate China's ability to out-innovate you," China-based strategy firm Automobility CEO Bill Russo told the WSJ.
More on Tesla: Musk Is Struggling to Understand What's Happening Around Him, Says Former Tesla Exec
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