Tesla’s China Collapse

By Douglas A. McIntyre Published Nov 4, 9:15AM EST

Quick Read

Tesla Inc.’s (NASDAQ: TSLA) share of the U.S. EV market has dropped, and it is in seventh place in China, the world’s largest EV market.
There is no single, easily fixable reason for Tesla’s troubles.

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Tesla’s China Collapse — © jetcityimage / iStock Editorial via Getty Images

Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) cannot get a break anywhere. Its U.S. market share has dropped to about 45% from a figure closer to 80% a decade ago. Legacy car companies, including Ford, GM, and Hyundai, have each taken small shares of the electric vehicle (EV) market, and together they now hold over 25%.

Tesla sales, and all EV sales, in the United States jumped in the third quarter as people rushed to get the EV tax credit of $7,500. Yet, Tesla profits were down due to reduced prices. And, now that this credit is gone, EV sales are expected to plunge.

Tesla’s unit sales in most EU countries decline month after month, due to increased competition, an aging lineup, and backlash from the political activism of CEO Elon Musk. There is no single sign that the decline will improve. Once again, legacy car companies in Europe are picking up a growing but modest part of the EV market.

The story is different in China, the world’s largest EV market. By some estimates, there are over 100 EV brands there. This has triggered a price war that has even affected the financial results of market leader BYD. Some EV companies have been slow to pay suppliers, and it is expected that some of the smaller manufacturers will soon go out of business.

In October, Tesla shipments in China dropped 9.9% year over year to 61,497. That puts its market share in seventh place, and well behind market leader BYD.

It is hard to put a finger on why Tesla’s deliveries in China are poor. Some say that Tesla has not had new models recently. Some say its cars lack the level of connectivity that others have. Others say Tesla is behind in the self-driving space.

There is no single reason for Tesla’s trouble in China. However, it appears that the U.S. company has a long way to go to solve it.

Tesla Stock Price Prediction and Forecast 2025–2030

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.