Like many foreign automakers, Tesla is finding it tougher to compete in China, as local rivals accelerate their electric vehicle plans and sales begin to slow.
China’s first-quarter sales hit 1.03 million EVs, growing 14.7% compared to a year prior, according to data from the Chinese Passenger Car Association. But that’s the slowest quarterly growth since the second quarter of 2023.
Tesla was the second biggest seller of EVs last month, with 89,064 made-in-China units sold, according to the China Passenger Car Association, up from 60,365 EVs in February. China’s largest EV company, BYD, sold 301,631 units.
Overall, BYD sold 300,114 new-energy vehicles between January and March, while Tesla delivered 386,819 units. Despite being beaten out in terms of number of cars delivered, BYD sales grew 13% year-over-year, while Tesla’s deliveries dropped 8.5%.
Automakers in China have been trapped in a price war led by BYD, which has introduced or teased several new models across its brands, such as the $233,000 Yangwang U9 electric supercar and a planned electric pickup truck. It’s also refreshed several models, including the ultra-cheap e2 and Seagull electric hatchbacks.
The Shenzhen-based carmaker is also rolling out its first electric pickup truck later this year in a direct challenge to Tesla’s Cybertruck and Ford Motor Co.’s F-150 Lightning.
And Xiaomi, a Chinese smartphone company, has beat Apple into the EV market. Xiaomi’s first-ever EV, the SU7, has been met with extreme enthusiasm by consumers in China.
Xiaomi CEO Lei Jun said the SU7 outperforms Tesla’s Model 3 compact in all but two areas. The SU7 costs 215,900 yuan ($29,900), or about $4,000 less than the 245,900 yuan ($34,020) Model 3 in China.
Tesla has also told workers at Gigafactory Shanghai to lower Model Y and Model 3 production and work five days a week instead of six-and-a-half days. Some production lines, including battery workshops, have been put under longer suspensions, and suppliers have been told to prepare for extended production limits through April.