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Tesla’s China sales fell by half in May, report claims
Tesla had won strong backing from Shanghai when it built its first overseas factory there in 2019. Photo: Reuters

Orders plunge in the electric car maker’s second-biggest market after the US

Tesla vehicle orders in China fell by nearly half in May over the previous month, a US report said on Thursday.

The company’s monthly net orders in China dropped to about 9,800 in May from more than 18,000 in April, a report in The Information said.

Nasdaq-listed Tesla shares closed on Thursday at $572.84, down $32.28 or 5.3%.

China is the electric car maker’s second-biggest market after the United States and accounts for about 30% of its sales. Tesla makes electric Model 3 sedans and Model Y sport-utility vehicles in a Shanghai factory.

Tesla had won strong backing from Shanghai when it built its first overseas factory there in 2019. 

The company’s Model 3 sedans were the best-selling electric vehicles (EVs) in the country before being overtaken by a much cheaper micro EV.

However, the recent slump Tesla’s sales comes as Chinese regulators take a tough stance on the company over increased safety concerns and consumer complaints in the past few months coupled with growing tensions with Washington.

Tesla’s China sales had slumped in April from March as well.

The news follows a US regulator, the National Highway Traffic Safety Administration, posting a notice on Wednesday saying the carmaker will recall almost 6,000 Model 3 and Y vehicles.

Tesla must inspect, tighten or replace brake calipers that could loosen and cause a crash.

Tesla has halted plans to buy land to expand its Shanghai plant and make it a global export hub, people familiar with the matter said, due to uncertainty created by US-China tensions.

The US has imposed 25% tariffs on imported Chinese EVs, forcing Tesla to limit China output in its global production.

Tesla ships China-made Model 3s to Europe, where it is building a factory in Germany.

With reporting by Agence France-Presse

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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