Elon Musk, the company’s chief executive, is fast losing out to Chinese electric carmakers in Tesla’s second-most-important market.
Tesla is getting crushed in China, its most important market outside the United States and one that it had dominated for years.
When Liu Jie, 32, decided to buy an electric car in October, Tesla was one of her top choices. But after test-driving a few Chinese cars, she went with a sports sedan from Xiaomi, a consumer gadget maker better known for its smartphones, kettles and robot vacuums.
“Xiaomi is more fashionable,” Ms. Liu said last week in Beijing. “Tesla, for me, it’s a little bit normal. You can see the Tesla Model Y everywhere.”
It’s not personal, buyers said. Tesla is still considered a top brand, and Elon Musk, Tesla’s chief executive, is admired in China. Beijing rolled out the red carpet when he broke ground on the company’s first overseas factory in Shanghai. Mr. Musk is credited with igniting China’s local electric vehicle industry.
But now that market is a blood bath of competition from Chinese rivals. Chinese drivers that once flocked to Tesla are turning more and more to local brands that offer more efficient cars with better technology, sometimes at half the price.
Tesla’s biggest rival, the electric car giant BYD, sold 481,318 cars in the first two months of this year, over three quarters more than it did over the same period last year. Tesla sold 60,480 vehicles in the first two months of the year, a drop of 14 percent from last year.