Sales of Tesla’s (TSLA) Chinese made electric vehicles dropped by 17.8% in November compared to the previous year, reaching 82,432 cars, according to data from the China Passenger Car Association (CPCA) released on Monday.
This decline represents the most significant drop since December 2022, when Tesla (NASDAQ:TSLA) experienced a 21% decrease following a reduced output and slashed pricing in response to an increase in inventory and a decrease in consumer demand.
However, deliveries of China-manufactured Model 3 and Model Y cars saw a 14.3% increase compared to October.
Tesla has faced mounting pressure to defend its position against competitors in the world's largest automobile market.
Chinese competitor BYD (002594.SZ) achieved another milestone with its Dynasty and Ocean series of electric vehicles (EVs) and petrol-electric hybrid models. The company witnessed a record-setting passenger vehicle delivery of 301,378 vehicles in November, a 0.09% increase from October and a substantial 31% surge compared to the same period in 2022.
Elon Musk was part of a select group of prominent U.S. executives who met with Chinese President Xi Jinping during the APEC summit in San Francisco in mid-November.
During the encounter, Tesla revealed in a Weibo post that President Xi expressed his backing for Tesla's growth and development in China. In response, Musk conveyed his appreciation for the rapid advancements observed in China's new energy vehicle sector.
However, despite sparking a price competition involving over 40 brands in China since the beginning of the year, Tesla's portion of the country's electric vehicle (EV) market decreased to 5.78% in October from 8.7% in September.
This decline occurred even as EV sales in China hit a monthly record.
Since late October, Tesla has increased prices in China five times. A move that comes at a time when the growth of electric vehicle (EV) demand in the country is decelerating, as consumers show a preference for more cost-effective plug-in hybrids.
Despite the expanding variety of battery-only vehicles available, consumers are leaning towards affordable options in the plug-in hybrid category.
Shares of TSLA are down 1.74% in mid-day trading on Monday.