Intensified competition! Tesla, Inc. (TSLA.US) saw its sales in China cut in half in February.

In February, the sales of Tesla, Inc. (TSLA.US) in major global markets were not optimistic. On March 10, data from the China Passenger Car Association showed that in February, Tesla, Inc.'s wholesale sales in China were 30,688 vehicles, a 49% decrease year-on-year and a 51% decrease month-on-month. This is also the first time since the start of domestic production that Tesla, Inc.'s monthly sales have dropped below 31,000 vehicles (excluding April 2022), hitting a new low in over two years. "The decline in Tesla, Inc.'s (February) sales is mainly due to a reduction in production of older models." Cui Dongshu, Secretary-General of the China Passenger Car Association, believes that whether in the Chinese market or for exports, the Model Y is facing certain challenges. The launch of the refreshed Model Y is bound to bring rhythmic changes to its market strategy, affecting the global market. Industry insiders believe that Tesla, Inc.'s market share in China is being eroded by domestic brands, and "Tesla, Inc.'s competition with Chinese local car companies is entering a new stage." Data from the China Passenger Car Association shows that the penetration rate of new energy vehicles in China was 49.5% in February, an increase of 15 percentage points compared to the same period last year. Among them, the penetration rate of new energy vehicles in domestic brands was 70%; the penetration rate in Deluxe Corporation vehicles was 23%; and the penetration rate in mainstream joint venture brands was only 4%. In terms of monthly domestic retail market share, in February, the retail market share of mainstream domestic brand new energy vehicles was 73%, an increase of 4.4 percentage points year-on-year; the market share of joint venture brand new energy vehicles was 2.1%, a decrease of 1.9 percentage points year-on-year; the market share of new forces was 19.9%, driven by brands such as Xiaomi Automotive, with a year-on-year growth of 2.6 percentage points; and Tesla, Inc.'s market share was 3.9%, a 4 percentage point decrease year-on-year. "The competitive landscape in the domestic electric vehicle market is now completely different." The aforementioned industry insiders stated that currently, Chinese manufacturers such as BYD Company Limited, Huawei, Xiaopeng, and Nio are reshaping consumers' choice criteria with more advanced manufacturing processes, more intelligent driving experiences, and more affordable prices, while Tesla, Inc. is still adhering to a premium pricing model, which undoubtedly puts it in a market predicament. "In the past, Tesla, Inc. could thrive on technological advantages, brand premiums, and Musk's personal charm, but now, as the technological dividend fades, price wars intensify, and consumer loyalty to the brand decreases." It is worth noting that not only in the Chinese market, but Tesla, Inc. has also encountered heavy blows in the European and American markets: sales in Germany plummeted by 76% year-on-year, selling 1,429 vehicles, while in France, sales decreased by 26% to 2,395 vehicles, and sales in the United States have been negative for four consecutive months. Analysts point out that behind this series of declines are the intense competition faced by Tesla, Inc., the lack of product iteration, changes in policy environments, and personal controversies involving Musk. This article is reprinted from the WeChat public account "Caixin", GMTEight Editor: Xu Wenqiang.