Tesla’s sales decline in China continues to accelerate, despite the automaker’s efforts to mitigate it, including offering discounts and introducing new variants.
The American automaker is expected to release its Q3 delivery results tomorrow, and as we previously mentioned, it is expected to be its first and last good quarter in a while due to the end of the tax credit for electric vehicles in the US pulling demand forward.
As for the most important EV market in the world, China, the results are already in, and Tesla saw an even steeper decline.
Tesla’s deliveries in China, the world’s largest EV market, were down roughly 4% in the first half of the year.
In Q3, Tesla’s deliveries in China decreased by 8%, and they are now down 6.4% year-to-date, based on insurance data.
The decline is happening despite Tesla having maintained strong incentives and discounts in the country all year, including 0% interest rates on its best-selling models.
Tesla even started delivering the new Model YL in China in Q3, which helped mitigate the decline in sales, but it wasn’t enough to stop it.
To incentivize buyers to place orders and take delivery by the end of the quarter, Tesla often sets deadlines for its incentives, such as the subsidized 0% interest rates on financing its cars.
However, due to demand issues, Tesla is quick to reinstate those incentives.
Q4 is no exception.
Tesla has already announced that 0% APR will be available on the Model 3 and Model Y until October 31. At the current rates, it represents a $1,500 to $2,500 discount on Tesla’s EV lineup.
Furthermore, Tesla is extending the ‘Intelligent Assisted Driving’ software transfer to new cars, the Chinese equivalent of “FSD” transfer, until October 31.
Electrek’s Take
You always have to keep an eye on China. China produces and consumes the majority of electric vehicles. It is by far the biggest and most competitive EV market in the world.
Tesla uses to dominate BEVs in China, but now it is in a clear steady decline.
Model YL appear to have helped a bit in Q3, but it wasn’t enough to slow the decline. I think the upcoming new stripped-down Model Y should help a bit more, but the problem with these new Model Y variants is that they mostly cannabilize Tesla’s existing Model Y sales.
There’s so much competition in China that there are already many viable options in the segments and price points that Tesla is bringing those new products in.
Let’s see how the stripped-down Model Y plays out, but if it doesn’t help much, maybe Tesla finally wakes up and do something about its aging vehicle lineup and invest more into refreshes and new models rather than betting the house on autonomy.
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