Tesla's car orders in China were nearly cut in half last month, according to a new report
- Tesla orders in China fell from 18,000 to 9,800 between April and May, The Information reported.
- China represents a crucial market for the electric carmaker, but the company has faced headwinds.
- Tesla's reputation has taken a hit in the country due to safety concerns surrounding its vehicles.
Tesla's popularity is plummeting in one of the company's most crucial markets, according to a report from The Information's Juro Osawa.
Orders for Tesla vehicles in China slipped nearly 50% in May as compared to the previous month, the publication reported. Only about 9,800 Tesla cars were ordered in China last month, while 18,000 were ordered in April, a source with knowledge of the data told The Information.
Tesla saw a spike in China orders in January, following the release of the Tesla Model Y SUV, but the orders have steadily declined in recent months, the media outlet found.
China is a top market for electric vehicles and accounted for 41% of the world's EV sales in 2020, according to research firm Canalys.
The country represents a critical space for Tesla, as the country claimed 29% of Tesla's global sales in the first quarter.
Former Tesla employees told The Information that China likely prefers to see local companies like Nio and Xpeng Motors succeed over Tesla and recent public safety complaints have only made the issue worse.
A series of Tesla crashes in the country have led to safety concerns surrounding the viability of the car company's brake system. Reports and posts about the accidents, which may be tied to brake malfunction, have been widely shared on Chinese media sites, with hundreds of posts from Chinese Tesla drivers expressing concern over the safety of the company's electric cars.
In April, a woman climbed onto a Tesla car at the Shanghai Auto Show, protesting what she described as a brake malfunction in her electric car. The incident quickly went viral and the company faced backlash.
Though, Tesla told Bloomberg it had tried to solve the issue, the company's immediate response, which suggested the complaint was invalid, led to a wave criticism in the country. One state-backed newspaper dubbed the US carmaker "arrogant." Following the incident, China's Central Political and Legal Affairs Commission told Tesla it needs to "face up to the torment of its Chinese customers."
Tesla shares dropped over 4% on the report that China orders had fallen. The news comes on the heels of data that suggests Tesla is losing ground in the global market. The company's global market share dropped from 29% to 11% between April and May, according to a report from Credit Suisse.