Tesla is being squeezed out of the Chinese market, and the pressure is currently falling on the sales workers, who are reportedly being pushed to their limits.
Over the last few years, Chinese automakers have stepped up their game significantly, and they are now not only competitive at the lower end of the market with affordable electric vehicles. They are also starting to put pressure on higher-end automakers, like Tesla.
China is the world’s biggest EV market by a significant margin, and it has been a critical part of Tesla’s growth phase from 2020 to 2023.
But now Tesla is facing incredible competition from the likes of BYD, Xiaomi, NIO, Li Auto, and others.
We reported earlier this year that Xiaomi’s SU7 has overtaken Tesla’s Model 3 in China, and now it is coming with a Model Y competitor.
Tesla has been hoping that its updated Model Y would help it stay comptivie in the Chinese market, but there are now reports to the contrary
The automaker has already been offering subsidized 0% financing to try to boost Model Y and Model 3 sales in the country.
Now, a new report on China’s Jiemian News based on interviews with current and former Tesla salespeople in China claims Tesla is now pushing for its Chinese sales staff to work 13 hours a day every day (translated from Chinese):
As the group that deals with the most front-line consumers, Tesla sales have in fact clearly felt the strong pressure to close deals. Many Tesla sales told Jiemian News that due to the inability to meet assessment targets on time, they have given up their two-day weekend off and switched to working seven days a week, “working from 9 a.m. to 10 p.m. every day, with an average daily working time of nearly 13 hours.”
The report claims that Tesla has instructed sales staff to aim for selling a car every day, but they are having trouble achieving half that rate:
According to the Tesla salesperson, the store assessment standard in Beijing is to sell at least one car per day, which means that they need to sell about 30 cars per month. But in reality, it is difficult for many salespeople in the store to sell 3 to 4 cars per week. They need to keep following up with customers and try their best to persuade them in order to get as close to the target as possible.
To sell a car per day, Tesla sales staff are told to create 10 user profiles, complete three online test drive invitations, and complete four test drives every day.
According to the report, the higher requirements also come with limited pay – resulting in record turnover at some of Tesla’s stores in China.
They used a Tesla store in Beijing as an example, where they claim they can do a full sales staff turnover in just a month and a half.
One Tesla salesperson told Jiemian that it is now way more difficult to sell Tesla vehicles in China:
“The days when we didn’t have to introduce products to users and orders were ‘automatically’ delivered to their doorsteps are gone forever.”
Tesla was also a victim of its own success in the country, where its vehicles have become somewhat familiar in the last few years, and the brand is no longer perceived as premium as it was in 2022-2023.
Electrek’s Take
Tesla was having problems in China before Trump’s election, but the problems appear to be getting worse.
Since last year, Tesla has already basically not been making any money on the Chinese market since it primarily sells lower-end RWD Model 3 and Model Y vehicles, which are already low-margin products, and Tesla has to subsidize them with 0% financing on top of it.
That’s in large part due to competition.
Unlike in North America and Europe, Tesla hasn’t been suffering from brand issues due to Elon Musk’s involvement in politics in China, but it might be changing now.
Trump’s escalating trade war with China is reaching new heights, deterring Chinese consumers from purchasing American brands.
I think Tesla was already being squeezed out of the Chinese market due to competition, but the trade war is likely to accelerate this process.
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