Sales of Tesla cars tumbled in April by nearly two-thirds from March, according to the country’s industry group. The electric vehicle maker is facing outcry from hundreds of owners who were pressured into paying full price for the standard range Model 3 before the release of a long range version.

Why it matters: Tesla’s revenue and margin are likely to come under pressure in the near term, given the weak April sales in a market expected to be a growth engine for the company.

  • Tesla announced they would raise the production capacity goal for the Shanghai Gigafactory by one-third to 200,000 Model 3 sedans per year in its first quarter earnings result last month. It maintained a goal of delivering 500,000 vehicles globally this year.

Details: Sales volume of Tesla’s made-in-China Model 3 sedans tumbled by 64% to 3,635 units in April from a previous month, figures released by China Passenger Car Association (CPCA) on Monday show.

  • First month slump: Tesla sales in the first month of each quarter is normally “relatively lower,” said Cui Dongshu, secretary general of CPCA, who added the company still had made good performance by making over 10,000 vehicles last month.
  • The sales decline comes as owners resorted to social media to express their outrage over pressuring buyers to purchase the cheapest Model 3 sedans to maintain its sales rate.
  • Short term thinking: Tesla’s salespersons allegedly hurried customers to finish the payment for their orders of standard range Model 3 sedans, while hiding the release of locally-built long range version scheduled for delivery in June, Fu Jiayi, a Tesla owner wrote early last month on Weibo.
  • Speaking to TechNode on Monday, Fu said Tesla has not provided any solutions to owners’ requests to fill the price difference for long range version, adding that more than 600 owners have collectively been seeking answers from Tesla.
  • Previously, dozens of customers had filed complaints to local regulators against Tesla for quietly replacing its “full self-driving” computers, listed on their sales document, with less advanced HW2.5 chips. China’s industry ministry in early March urged the company for “immediate improvement” to ensure product quality and safety. (our translation)
  • Tesla did not respond to a request for comment.

Context: China’s new energy vehicle (NEV) sales fell by 30% year-on-year to 64,000 units last month, as decline was narrowed from 49% in March. The recovery was still less than expected, compared with just 3.6% year-on-year decline in general auto sales last month, according to CPCA figures (in Chinese).

  • Auto majors such as BYD and GAC reported strong results. BYD’s electric compact sedan Qin topped the list of best-selling EV models with 5,096 units being sold last month, and GAC followed Tesla by selling 3,586 Aion S all-electric sedans.
  • Chinese young EV makers also outperformed. Nio deliveries in April more than doubled from the previous month to 3,155 vehicles, followed by Meituan founder Wang Xing-backed Lixiang with 80% month-on-month growth rate after delivery started for four months.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen