Car Industry

Tesla's Chinese market sales are down by 70 percent, report says

The China Passenger Car Association claims that Tesla only sold 211 cars in China in October.

Tesla's sales in the world's biggest market for cars are down 70 percent compared to this time last year thanks to increased tariffs and that has to be more than a little concerning for the Big T.

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China is the world's biggest car market and also the biggest market for alternative fuel vehicles, like electric cars. It would make sense then that Tesla should not only sell its cars there but that those cars should sell like crazy. Well, according to a report published on Tuesday by Reuters, that's not the case.

How bad are things for Tesla in China right now? According to Reuters, Tesla sold just 211 cars in October. That number is down 70 percent from October of 2017, based on figures from China's Passenger Car Association.

"This is wildly inaccurate. While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin," said a Tesla representative, in a statement to Roadshow.

Why would China, once clearly so hot for Tesla, now be looking for its EV thrills elsewhere? If you said tariffs, you're right. The Chinese government raised its import tariffs on US-built automobiles to 40 percent in July, as a response to the worsening trade relations with America.

That added tax makes what is already not a cheap car into something that's prohibitively expensive. To combat this, Tesla announced last week that it would cut the prices of Model S and X by between 12 and 26 percent. Will that be enough to make a difference? Who knows.

The upshot for Tesla is that this is all likely a temporary problem, at least for Model 3 sales. Tesla has already secured the land on which it plans to build its second Gigafactory. This facility, located outside Shanghai, will combine vehicle production and battery pack production, unlike its facilities in the US.

Tesla didn't immediately respond to requests for comment.

Update 11/27 9:41 P.M.: Updated piece to include comment from Tesla.