By LIU Zeran
Tesla sales again declined substantially last month. Although deliveries of the locally-made models 3 and Y increased month-on-month, more than 80,000 vehicles moved off the lot in November than did this time last year.
Demand is weak, forcing Tesla to cut production and prices. Both models are now cheaper than ever but are still hard to shift.
In November, China’s top EV maker was BYD, as usual, shipping 300,000 cars, year-on-year growth of 31 percent.
Price cuts boost sales while reducing margins. In Q2, Tesla sales increased by over 80 percent while gross margin dropped to its lowest level in three years. This trend continued in Q3 when the margin hit 16.3 percent and deliveries were up 6 percent.
To make matters worse, no one seems to like the upgraded Model 3: not enough buttons to push and the screen is annoying.
With new models from Xiaomi and Huawei’s countless “partners” entering the ring next year, Tesla is having some tough times ahead.
In the absence of more intelligent strategies, the tedious price war is expected to continue in 2024. If Tesla is to maintain its position in China, something interesting needs to happen soon. Another price cut will not do the trick.
