Despite fresh price cuts in the region, Tesla sales in China tapered off in October.
The China Passenger Car Association (CPCA) reported Tesla delivered 71,704 China-made Model 3 and Model Y vehicles in October, which was a 14% drop from September. Tesla’s September sales of 83,135 were an all-time high for Tesla in China, after the automaker upgraded its Shanghai Gigafactory this summer in order to boost production to over 750K vehicles a year.
Despite the drop in Tesla deliveries, total “new energy” vehicle sales in China, which includes both EVs and hybrids, jumped 87% to 680,000 units, according to preliminary data from the CPCA. Warren Buffett-backed BYD delivered 217,518 cars in October, leading the region in sales though most of those vehicles are hybrids.
Tesla’s drop in October deliveries comes after the automaker announced price cuts in the last week of October, and new incentives like a rewards program for new buyer referrals.
The automaker had cut prices across the board for its offerings in China, with the entry-level Model 3 sedan dropping by nearly 5% to 279,000 yuan, and the entry level Model Y SUV’s price coming down by 9% to 316,000 yuan.
The price cuts came as concern grew demand may be waning in China due to economic pressures. CEO Elon Musk said as much during the Q3 earnings call, claiming “China is experiencing a recession of sorts,” mostly tied to a softening property market.
As of today, Tesla’s rivals like Xpeng, Nio, and Li Auto haven’t cut prices to match Tesla’s move.
Tesla’s price cuts also come as the automaker reportedly closed its flagship Shanghai showroom, in a move described as a cost-cutting measure. Reuters reports Tesla has relocated its Shanghai showroom to a smaller location in a mall called Raffles City.
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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