24/7 Insights
- China is becoming a graveyard for car companies that are not local.
- That is especially so for those trying to sell electric and hybrid vehicles there.
Toyota Motor Corp. (NYSE: TM), the world’s largest car company, is struggling. Its sales fell by 0.5% in April. That was not the bad news. Sales in China slid 27%. That was, according to Reuters, even though it had aggressive incentive programs. It is tough news for manufacturers that compete with rising Chinese rivals, particularly those in the electric vehicle (EV) and hybrid segments. The market is crucial to Tesla Inc. (NASDAQ: TSLA), which counts on it for a very large percentage of its sales.
Although Toyota sells hybrid models in China, it does not sell EVs. The market has moved quickly to locally made hybrids and EVs, which has helped local companies like BYD but hurt manufacturers like Tesla and now Toyota.
Toyota and Tesla will continue to struggle in China because there are 200 hybrid and EV makers there. Some are relatively large, including BYD, the largest EV company in the world. Although not all 200 companies will stay in business, each represents a market share challenge to Tesla, Toyota, and other Western vehicle operations.
China has become a graveyard for several Western car companies. Ford’s sales have trended down by double-digit percentages from last year. General Motors has posted similar numbers.
Tesla has been described as a very different company from Toyota because of their product mixes. However, they share a major hurdle in China’s crowded market.
See the Top 10 EV Brands Right Now
∴
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s made it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.