More than a decade after Tesla Inc.’s (NASDAQ: TSLA) first electric offering, the Tesla Roadster, first hit the roads, the California-based company has become the largest electric vehicle (“EV”) maker as well as the most valuable car company in the world. Despite the relatively high prices of its vehicles, Tesla continues to attract plenty of customers who are more than willing to pay a high premium by combining top-notch modern designs, high performance and innovative technology. Having carved a significant share of the American market for itself, Tesla set out to conquer the largest electric vehicle market in the world — China.
It has been quite an uphill battle, however. Recent statistics show that despite more Chinese drivers opting for electric vehicles in the past couple of months, Tesla sales in the country have plummeted. Data from the China Passenger Car Association (“CPCA”) shows that last month, Tesla sold only 8,621 cars in the world’s largest EV market, representing a 69% drop in month-on-month sales and a 26% drop in year-on-year sales. This was the first time Tesla experienced an annual decline in sales in the Chinese market since opening its Shanghai Gigafactory back in January 2020. However, 24,347 Teslas made in the Shanghai gigafactory were exported to Europe.
On the other hand, local EV makers have been making a killing, with the China Association of Automobile Manufacturers (“CAAM”) stating that by last month, local brands had sold around 271,000 units of new energy vehicles, representing a 164% year-on-year increase. One of the reasons local brands have become increasingly popular is their affordability. While you have to part with tens of thousands of dollars to purchase a Tesla, some local EV makers sell electric vehicles for as low as $4,000.
Tesla’s progress in the Chinese market has also been held back by a few scandals, including customer complaints about vehicle quality, subsequently causing five Chinese regulatory agencies to launch investigations into the quality of the vehicles built at the Shanghai Gigafactory. There have also been concerns about data privacy and national security due to the onboard cameras installed on Tesla vehicles, with Chinese media reporting that Teslas have been banned from entering military complexes because their cameras could be used for spying. All of this negative press coupled with high prices has dampened the demand for Tesla vehicles in the Chinese market, ultimately leading to reduced sales.
The entry of Net Element (NASDAQ: NETE) and other new players into the EV space will take the competition a notch higher, and the customer will ultimately benefit since massive competition tends to bring out the best in all players as they work to attract buyers.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
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