Tesla's China Orders Halved in May Amidst Increased Government Scrutiny: Report

Tesla's vehicle orders in China nearly halved in May, when compared to April, against the backdrop of increased government scrutiny on the US electric carmaker, the Information reported on Thursday, citing internal data.

The company's monthly net orders in China dropped to about 9,800 in May from more than 18,000 in April, the report said, sending shares down nearly 5 percent in afternoon trading.

China is the electric car maker's second-biggest market after the United States and accounts for about 30 percent of its sales. Tesla makes electric Model 3 sedans and Model Y sport-utility vehicles in a Shanghai plant.

Tesla had won strong backing from Shanghai when it built its first overseas factory there in 2019. Tesla's Model 3 sedans were the best-selling electric vehicles in the country before being overtaken by a much cheaper micro EV.

However, the recent slump in Tesla's sales comes as Chinese regulators take a tough stance on the company over increased safety concerns and consumer complaints in the past few months coupled with growing tensions with Washington.

Tesla's China sales had slumped in April from March as well.

Tesla sold 11,671 Model 3 and Model Y vehicles in April in China compared with March, when it sold most of its 35,478 China-made cars locally, according to Chinese auto industry body CPCA's secretary general Cui Dongshu.

Tesla did not immediately respond to Reuters' request for comment.

© Thomson Reuters 2021