Tesla's Chinese sales crater in October

Tesla is facing a serious chill in China, with the American automaker's local sales hitting a wall in October and posting their worst performance in years. This slump comes even as the overall market for EVs in China continues to grow, leaving Tesla stuck on the sidelines. The company delivered just over 26,000 vehicles to Chinese customers in October - that's a steep 36% drop from the more than 40,000 cars it sold in the same month last year.

This is not just a bad month either. It is part of a worrying trend for the company. Tesla's sales in China are down by more than 40,000 cars so far this year compared to the same period last year. For the first ten months of the year, Tesla's total retail sales in China reached 458,710 units, an 8.38% drop year-over-year. The automaker now faces a tough challenge: it must achieve two back-to-back record-breaking months in November and December just to avoid its first full-year sales decline in the country.

Surprisingly, Tesla's main problem appears to be its most popular vehicle, the Model Y. The SUV saw its domestic sales collapse in October. Chinese buyers took home only 19,488 vehicles, the lowest number since March. This is a massive 46% fall compared to the same month last year. It was also nearly a 62% drop from September's sales. For the year, Model Y retail sales in China total 312,331 units, which is down 16.5 percent. Hopes that a refreshed Model Y and a new Model YL would restart growth have clearly not panned out.

But there is a silver lining: while local sales for the Model Y are failing, Tesla's Shanghai factory is shipping the car abroad at a stunning rate of 19,074 units in October. This was just over a 214% increase from last year and a 118% jump from September. For the year to date, Model Y exports are up 41%, with 104,898 units sent overseas.

The story for the Model 3 sedan is more complicated. The Model 3 actually showed a bright spot, ending five straight months of year-on-year declines. October retail sales hit 6,518 units, a 52% increase compared to last year. Unfortunately, this good news came with a catch - that number was still nearly 68% lower than in September. For the year, the Model 3 is actually a positive performer, with total sales of 146,379 units, up just over 15%.

The export story for the Model 3 is the opposite of the Model Y's. In October, Tesla exported 16,417 sedans, a drop of 24.5% year-over-year. The year-to-date figures are also down, with 104,253 units exported, a 38% decrease. This mixed performance from both models paints a confusing picture. The Shanghai factory serves as a hub for both local sales and exports, and right now, it is excelling as an export hub for one model while failing to gain traction at home with that same vehicle.

The combined numbers, which include both domestic sales and exports, also look weak. Tesla's total wholesale figures from China are down 10% year-over-year. If this trend holds, it will be the second consecutive year of a wholesale decline. Tesla appears to have hit a plateau, and while it waits to launch cheaper versions of its electric cars as it has in the rest of the world, local brands are capturing the growth that Tesla is missing.

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