Tesla (NASDAQ:TSLA) just clocked its eighth straight month of declining China-made EV sales, delivering 61,662 vehicles in May down 15% from a year ago. While that’s a modest 5.5% bounce from April, it’s hardly a turnaround. The Model 3 and Model Y are starting to feel their age, and even fresh incentives like software transfer perks and rural EV promotion programs haven’t done much to reignite demand. Meanwhile, Europe isn’t helping either. Sales there have also cooled, with some analysts citing CEO Elon Musk’s political antics as a potential turn-off for more moderate buyers.
All this is happening as the price war Tesla kicked off in 2023 keeps getting bloodier. More than 40 brands have joined the discount race, and China’s government is now urging automakers to stop the bleeding. But BYD (BYDDF) isn’t backing offit rolled out new promotions on over 20 models in late May. Geely and Chery followed suit. Tesla, on the other hand, finds itself stuck in the middle: newer rivals are undercutting it on price while also launching fresher, tech-savvier vehicles. Without a major product refresh soon, it’s hard to see how Tesla claws back its edge.
BYD, for its part, continues to pull ahead. The company sold 376,930 passenger vehicles in Maya 14.1% year-over-year gain, albeit slower than April’s 19.4% surge. Still, that’s more than six times Tesla’s China-made output last month. And while Tesla is still a global EV heavyweight, it’s losing steam in the market that matters most. The bottom line? BYD is expanding. Tesla is reacting. That’s not a position investors typically cheer.
This article first appeared on GuruFocus.
