Tesla’s love affair with China will weather recent sales slump, backlash over safety concerns, say analysts
- A report by technology news website The Information said the carmaker’s vehicle orders in China plummeted in May
- The American giant has had a rocky few months in China involving recalls, questions over safety issues and a grilling from the authorities
A report by technology news website The Information, citing a single source familiar with the data, said billionaire Elon Musk’s company saw its vehicle orders in China plummeted to about 9,800 in May. That compares with deliveries of 25,845 in April and 35,478 a month before that, according to data from the China Passenger Car Association (CPCA).
Responding to enquiries from the Post, Tesla, still the runaway leader in China’s premium electric vehicle segment, said it based its car deliver data on official figures from the CPCA.
Tesla’s shares dropped more than 5 per cent in New York on Thursday after The Information’s report.
“It is too early to say that the honeymoon is over, as [Tesla’s] products are still quite popular among Chinese buyers,” said David Zhang, an analyst with the research centre for automobile industry innovation at the North China University of Technology. “Its sales are still way ahead of other EV makers.”
Guangzhou-headquartered Xpeng delivered 5,686 units in May while Shanghai-based NIO delivered 6,711.
Tesla’s sales slump came after a run-in with Chinese officials and customers over the quality and safety of its cars in the world’s biggest EV market.
It followed an incident in April when a woman in a T-shirt emblazoned with the words “brake malfunction” and a Tesla logo, jumped on top of a Tesla car on display at the Shanghai Auto Show, to publicly chastise the firm for a crash involving her Model 3.
All of this came after Tesla executives were grilled by senior watchdogs in February about the quality of the company’s Model 3s.
“Callback is quite usual and it does not mean Tesla’s cars are of bad quality,” said Ethan Qin, a designer, who bought his Tesla Model X four years ago. “There are minor issues, for example software that sometimes responds slowly with my Tesla, but such things happened with my previous Audi car as well.
“EV is still a new thing, it takes time for the technologies to mature and Tesla has done an excellent job.”
In March, the Chinese military banned Tesla vehicles from its facilities because of concerns about cameras installed on the cars.
“It is not a specific case of whether Tesla will face more restrictions in future, but a general trend that when vehicles are becoming more digitised and connected with a lot of big data accumulation, data security will become a more pressing concern for the industry and regulators,” said Vincent Ha, senior director with rating agency Pengyuan International.
“Other than that, what Tesla is facing – things like consumer rights, product recall and policies on autonomous driving – are not that different than their peers.”
In a study of China’s EV market by JD Power published in September, Tesla was ranked the second-best battery-powered car after NIO, a start-up believed to have the potential to eventually challenge Musk’s company.
