Tesla Inc.’s vehicle orders in China nearly halved in May from April, against the backdrop of increased government scrutiny on the U.S. EV maker, the Information reported on Thursday, citing internal data.
The company’s monthly net orders in China dropped to about 9,800 in May from more than 18,000 in April, the report said.
Tesla did not immediately respond to a request from Reuters for comment.
China is Tesla’s second-biggest market after the U.S. and accounts for about 30 percent of its sales. Tesla makes electric Model 3 sedans and Model Y crossovers in a Shanghai plant.
Tesla had won strong backing from Shanghai when it built its first overseas factory there in 2019. Tesla’s Model 3 sedans were the best-selling EVs in the country before they were overtaken by a much cheaper micro EV made by the joint venture between General Motors and SAIC Motor .
But the U.S. company is now facing scrutiny over its handling of customer complaints over quality issues.
Last month, Reuters reported that staff at some Chinese government offices have been told not to park their Tesla cars inside government compounds due to security concerns over cameras installed on the vehicles.
In response, Tesla is trying to boost its engagement with mainland regulators and is beefing up its government relations team, sources have told Reuters. It has set up a data center in China to store data locally and plans to open a data platform for customers.
In China, Tesla competes with several EV startups including Nio Inc., Xpeng Inc. as well as conventional EV companies like BYD.
