Tesla boss Elon Musk 'misled' by local speculators but won't give up China market

Elon Musk, prominent US tech industry leader, has learned a hard lesson from market speculators in China, though the founder of electric car maker Tesla said he wouldn't give up after recent sales problems in the world's largest economy.

Tesla had been "misled" by Chinese speculators into believing that demand for their vehicles was "extremely high", leading to an excess of inventory, Musk said during a visit to China, where he attended the Boao Forum in Hainan province.

Many orders were not placed by genuine buyers, but resellers who cancelled when the cars arrived, the official news agency Xinhua reported, quoting Musk.

"China is the only place on earth where we have excess inventory. We are essentially selling cars that speculators ordered but we were unable to deliver," he said.

Equity research firm JL Warren Capital said 260 units of the Tesla Model S were licensed in February, a 45 per cent decline over the month before.

It was estimated that around 1,600 Tesla vehicles were imported to China but not properly licensed due to speculators' whipped-up demand.