Tesla Inc shares are trading lower following reports suggesting declining sales in China and European markets. The decline in sales has been a persistent trend, with Tesla seeing sales declines on its China-made vehicles for seven straight months.
Sales Decline in China
The sales decline in China is a significant concern for Tesla. In May, deliveries for Model 3 and Model Y vehicles made in China dropped 15% year-over-year to 61,662. Despite this decline, China-made vehicle deliveries were up 5.5% from April. However, investors are concerned as competition ramps up in the region, with BYD sales rising 14.1% year-over-year in May, and other China-based EV companies also seeing gains in China.
Sales Decline in Europe
In addition to the decline in China, Tesla is also seeing demand weakness across Europe. Sales across Britain, Germany, and Italy fell for the fifth straight month in May. A spokesperson for Tesla in Britain attributed the declines to the transition from the company’s older Model Y vehicles to the updated version being made in Berlin. The spokesperson expects to see an increase in sales in the region next month.
Ongoing Challenges
Tesla is also facing ongoing challenges, including scrutiny over its Full Self-Driving system. The company is currently under investigation from the National Highway Traffic Safety Administration, which is looking into whether Tesla’s supervised driving system is potentially defective. Meanwhile, Tesla has begun testing its driverless vehicles on public roads in preparation for the robotaxi rollout.
Testing and Development
Elon Musk posted on social media that Tesla has been testing self-driving vehicles and is about “a month ahead of schedule.” The company is preparing for its planned robotaxi launch later this month.
Price Action
Tesla shares were down 3.24% at $333.03 at the time of publication on Wednesday.
Conclusion
The decline in Tesla shares is a significant concern for investors. The company is facing challenges in China and Europe, and is also under scrutiny over its Full Self-Driving system. As the company prepares for its robotaxi launch, it will be important to watch how these challenges are addressed.
Additional Reading
- Ross Gerber says Tesla has a lot of work to do on FSD ahead of robotaxi launch: Waymos are way better
- Photo: courtesy of Tesla.