Elon Musk Blinks; Tesla China Strategy Revamped Over Fierce Rivalry
Tesla Inc. is changing its marketing approach in China as fierce competition from domestic rivals and uneven demand puts its growth plans in the world's biggest electric-car market at risk.
The EV pioneer has extended insurance subsidies of as much as 8,000 yuan ($1,100) for new buyers, according to a post on its Weibo account, reinstated a user referral program and even advertised on a local TV shopping channel -- a rare move for a company that's proudly eschewed traditional advertising avenues.
The moves come after Tesla cut prices across its Chinese lineup for the first time in 15 months in October, as it faces a slew of headwinds there, from persistent Covid restrictions to more muscular local competitors. The prospect of more challenging conditions in China is adding to pressure on the carmaker's shares, which sank to a two-year low on Monday and have lost almost half of their value in less than two months.
Tesla recently upgraded its Shanghai factory to double capacity to about 1 million cars a year. Yet in a sign the company is struggling to boost sales to meet those ambitions, wait times for cars in China have shrunk to as little as one week from as long as 22 weeks earlier this year.
Failing to shift the extra production could endanger Chief Executive Officer Elon Musk's target of 50% annual global sales growth for years to come.
“We can tell from the shortened lead time that the order intake for Tesla in China is insufficient,” said Wang Hanyang, an auto analyst at Shanghai-based 86Research Ltd. “The company is facing great competition from local competitors as well as lower consumer confidence. The promotions, including insurance subsidies, may also extend into next year.”
Musk last month flagged that demand
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