Following the news, Tesla's share price fell 5.33%, with its market value evaporating by nearly USD 31 billion (approximately CNY 198.5 billion).
Tesla's sales volume in China had already seen a significant decline in April 2021. According to the data of CPCA (the National Passenger Car Market Information Committee), Tesla's wholesale sales volume in China for the month was 25,845, with a month-on-month decrease of more than 27%. Tesla's global market share of electric cars also declined, from 29% in March to 11% in April, according to the latest report of Credit Suisse.
Tesla officially entered the Chinese market in 2014. It currently accounts for around 30% of Tesla's total sales, making it its second-largest market after the United States. In 2019, Tesla established its first overseas factory in Shanghai, which received strong support from the Shanghai government, making the Tesla Model 3 the best-selling electric car in China.
However, since 2021, Tesla has been plagued by vehicle safety problems, resulting in a number of traffic accidents. On April 19, a public protest at the Shanghai auto show, following on from the 'roof defect' recall incident last year, seemed to draw attention to a continuous stream of safety problems, intensifying the negative public opinion about the quality of Tesla's electric cars.
Additionally, on June 2, Tesla recalled nearly 6,000 electric cars in the United States. The following day, China's State Administration of Market Supervision issued an announcement on its official website that Tesla recalled 734 electric cars.