According to data released on Tuesday (June 4th) by the China Passenger Car Association (referred to as CPCA), Tesla’s Shanghai factory saw a year-on-year decrease of about 6.6% in shipments in May, highlighting the challenges faced by this American electric car giant.
CnEVPost, a Chinese electric vehicle news outlet, reported that CPCA’s data showed Tesla’s China factory sold 72,573 cars in May, including sales in the Chinese market and exports to overseas markets.
Although sales in May increased by 16.74% compared to April (62,167 units), it decreased by 6.59% compared to the same period last year when 77,695 units were sold. Bloomberg reported that this is the third consecutive year-on-year decline in shipments from Tesla’s Shanghai factory this year.
Tesla’s China factory saw an 18% year-on-year decrease in deliveries in April.
Data compiled by CnEVPost shows that from January to May, Tesla’s China factory sold 355,616 vehicles, a 7.12% decrease from the same period last year when 382,859 units were sold.
CEO Elon Musk has been battling intense competition and sales decline. Media such as Reuters saw an internal Tesla memo in April indicating the company planned to cut over 10% of its global workforce.
In China, Tesla faces fierce competition from local companies like BYD, NIO, XPeng Motors, and Li Auto. BYD, supported by the Chinese government, sold 330,488 vehicles in May, marking a 38.2% year-on-year increase.
Tesla’s Shanghai Gigafactory currently has an annual production capacity of over 950,000 vehicles. The factory produces Model 3 and Model Y, supplying both local consumers and serving as an export hub for Tesla.
Reuters previously reported that Tesla’s Shanghai factory planned to reduce Model Y production by at least 20% from March to June. It remains unclear whether the production cut will extend into the second half of the year or affect Model 3, as well as if similar production reduction measures are being taken at Tesla’s factories in the US and Germany.
On June 4th, Reuters reported that some Tesla shareholders are reducing their holdings, believing that the dazzling growth days of the electric car manufacturer are over. Tesla’s stock price has dropped nearly 30% this year, more than 50% from its 2021 peak, leading to a market value reduction of about $600 billion. Despite falling short of analyst expectations in the first quarter, Musk stated that the company will launch more affordable new models by 2025.
Morningstar data indicates that among the 18 mutual funds that have held Tesla stocks since 2019, 10 reduced their holdings in the last quarter, with 4 of them decreasing their holdings by 15% or more, while only 5 increased their holdings.