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Tesla sales in China fell 70% last month in the latest demonstration of the negative impact of the US-China trade war on business. The news from China's private car badociation, reported by Reuters, came a few days after the automaker announced plans to cut prices for the Chinese market.
China is a key market for Tesla, where it plans to build a gigafactory. and last month, it sold only 211 cars there, according to the badociation's data. A price cut is logical given the persisting trade tensions between Beijing and Washington, and an acceleration of gigafactory plans would also make sense. Tesla is also planning to transfer some of its production to China.
The company announced last month the launch of pre-orders for its affordable model, Model 3, in Europe and China before the end of this year and added that it was considering moving production. of some models 3 in China next year. "We are aiming to import portions of Model 3 production into China in 2019 and to gradually increase the level of localization through local sourcing and manufacturing," said Tesla in its report on the results of the third quarter. Cars made in China are said to be sold in China, Tesla added.
Also, earlier this week, CEO Elon Musk admitted that the company was about to collapse due to delays in the production of Model 3.
"Tesla has been threatened with death because of the model 3. ramp production. Essentially, the company was bleeding money crazy and if we did not fix it for a short time, we would die. It was extremely difficult, "said Musk in an interview with Axios on HBO.
The bleeding money was certainly not a secret at the time Musk was in was speaking – last spring – but the company managed to turn the situation around quickly enough not to just avoid bleeding death, but even make a profit for the third quarter of the year.
By Irina Slav for Oilprice.com
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