China’s EV startups are piling the pressure on Tesla.
The US automaker’s Chinese arm sold 83,200 cars in August, a 4% drop from the same period last year, according to data released on Tuesday by the China Passenger Car Association.
The EV giant has not faced the same public backlash in China over CEO Elon Musk’s politics as it has in the US and Europe, but Tesla’s sales in the world’s largest auto market have still struggled this year.
By contrast, its local rivals are booming. EV startups Nio, Leapmotor, and Xpeng all reported record monthly sales in August, while giant auto conglomerate Geely saw its sales surge 38% last month to nearly 150,000 vehicles.
China’s EV market is famously competitive, with over 100 companies battling for customers.
Local brands have launched a wave of new affordable electric SUVs in recent months, many of which are directly targeting Tesla’s best-selling Model Y.
Xpeng launched the $27,320 G7 SUV in July, with Nio quickly following with the $36,940 L90 six-seater. Both are priced below the Model Y and have seen strong demand, but they are dwarfed by Xiaomi’s YU7, which received more than 240,000 preorders in 24 hours when it launched in June.
Smartphone maker Xiaomi, which only launched its first electric car last year, sold over 30,000 cars in August as it races to ramp up production to meet intense demand.
Waiting times for the YU7 have been advertised as more than a year, and CEO Lei Jun even recently suggested that customers should consider buying a Tesla instead if they would rather not wait.
Tesla’s sales in China have been hurt by its stale product lineup, and the company recently unveiled an extended six-seater version of the Model Y as it looks to fight off fierce local competition.
On the bright side for Tesla, it is not the only company facing pressure from the growing popularity of China’s EV startups. BYD, which is on track to overtake Tesla as the world’s top seller of EVs this year, also reported flat sales in August.
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