Tesla stock is taking a massive nosedive after its biggest market is showing signs of massive slowdowns.
ElecTrek reports on the stock price crash for the EV manufacturing giant after its sales numbers in China were reportedly dwindling. The information came from an insider who claimed that Tesla orders in China fell to a measly 9,800 last month, from a high of over 21,000 orders back in March.
According to a report on Investors.com, Tesla shares dropped a significant 5.3 percent, pushing it back below the 600 level at 572.84, as well as its 200-day moving average. As a result, local competitors such as Li Auto, Xpeng, and Nio moved in and grabbed some market share, with all three reporting increased sales numbers for May.
According to an insider, this drop in sales numbers basically means that the Chinese market's appetite for Tesla EVs are rapidly shifting, despite Tesla founder Elon Musk being hailed as a celebrity in the country.
Also, considering how many cars that a Tesla factory can produce, you'll see those order numbers in a very different light. According to a report by CNBC, the Tesla factory in Shanghai has the capacity to manufacture around 500,000 EVs a year. Suppose that the company is only getting under 10,000 orders a month, and that wouldn't even crack half of the factory's overall production capacity.
Tesla Isn't Doing Good in China, But Why?
The company's recent struggles in the Chinese market might probably be their fault on numerous occasions.
Tesla, for one, has been trying to contain the fallout of their handling of various customer service complaints in the country, which caused a massive public outcry. Among these was a certain customer who performed multiple demonstrations after they suffered an accident in their Tesla EV early this year.
The aforementioned customer was the one who crashed Tesla's booth at the Shanghai Motor Show, climbing on top of a display car to shout to onlookers that the brakes on Tesla's cars don't work. As a result, the company responded via their Chinese social media page, which trended for all the wrong reasons. According to a report by Electrek, the response was characterized as "cocky" by the general public.
Aside from this, Elon Musk's company has also been trying to grapple with issues such as product recalls and safety investigations in China. So far, it looks like this has become a full-blown PR nightmare for the automaker, which explains the change in public perception about the company.
Not the First Time that Tesla Cars Are In Hot Water Overseas
Last month, a good number of Tesla vehicles in Norway apparently suffered from battery woes after a certain software update. The owners of the cars reported a halving of the vehicles' effective range and top speed, which caused a Norwegian court to order the EV maker to pay out around $16,000 in damages to each affected customer.
Now, with their woes in China (and a price hike that wasn't received so well), Tesla and Elon Musk have their hands full in terms of keeping the automaker's overall reputation afloat.
This article is owned by Tech Times
Written by RJ Pierce