Sales by Tesla and other electric vehicle companies in China declined last month, burdened by weaker demand and rising competition in the world’s largest auto market.
Elon Musk’s EV maker shipped 60,365 EVs made in China in February, a 19% decrease compared to last year, according to preliminary data from the Chinese Passenger Car Association released Monday. Those sales mark a steep decline from prior months — 71,447 units in January, 94,139 in December, and 82,432 in November — and its lowest monthly report since December 2022.
Tesla stock fell more than 7% on Monday before shedding another 2% on pre-market trading on Tuesday.
BYD, the Warren Buffet-backed Chinese automaker that dethroned Tesla as the world’s top seller of EVs in the fourth quarter, also saw sales decline last month. BYD’s sales hit 121,748 units in February, down from 201,943 sales in January. In February, EV startups Nio and Xpeng recorded 19% and 45% declines, respectively, compared to sales a month prior.
The slump is partly due to China’s Lunar New Year holiday, which lasted from Feb. 10 to Feb. 17. Many businesses and factories are closed during the holiday, which typically hurts auto sales.
Tesla has also been facing increased competition from BYD and other rivals in China as EV makers continue to slash costs and offer incentives to attract new buyers.
Last month, the U.S. automaker introduced incentives that would reduce the cost of buying its rear-wheel-drive Model 3 sedans and Model Y SUVs by as much as 34,600 yuan ($4,807). The incentives came shortly after BYD slashed prices and announced cheaper editions for four consumer vehicles. That triggered price cuts from competitors, including Hyundai Motor and the General Motors-backed joint venture SAIC-GM-Wuling.
BYD on Monday also introduced a new — cheaper — version of its best-selling Yuan Plus crossover, also known as the Atto 3. The model is on sale for 119,800 yuan ($16,644), or almost 12% less than the version it has replaced.