Tesla halts Model S, Model X orders in China as sales drop and tariffs bite

Tesla has removed the 'order now' option for Model S and Model X in China as it battles falling sales, rising local competition, and deepening US-China trade tensions

Elon Musk’s electric car company Tesla on Friday (IST) suspended new orders for its Model S and Model X vehicles on its Chinese website, according to a Bloomberg report.

 

New orders for the two imported models are also no longer available on Tesla’s WeChat mini programme account, the report added. Previously, Tesla’s China website offered an ‘order now’ option for Model S and Model X until the end of March; however, it was removed on Friday.

 

Tesla lags behind amid rising competition and slowing demand

 

On April 2, it was reported that Tesla’s March sales were down 11.5 per cent year-on-year. The company sold 78,828 electric vehicles in March. However, sales surged 157 per cent compared to the 30,688 cars sold in February, according to a CNBC report.

 

 

The US carmaker has been grappling with multiple challenges in both China and its home market. In China, Tesla is under pressure from fast-growing domestic competitors such as BYD, which continues to report strong growth. In March, BYD sold 371,419 new energy vehicles, including battery hybrid models.

 

In the US, Tesla saw a 13 per cent decline in its sales—the steepest drop in three years. Analysts have partly attributed the fall to Elon Musk’s controversial appointment as the head of the Department of Government Efficiency (DOGE) and his public support for US President Donald Trump.

 

US-China tariff war casts shadow on Tesla’s prospects

 

The development comes amid rising trade tensions between the US and China. China has responded to President Donald Trump’s tariff hikes with steep retaliatory tariffs of its own.

 

Initially hit with a 20 per cent tariff, China was later subjected to a 34 per cent duty under Trump’s reciprocal tariff announcement. In response, China imposed a 34 per cent tariff on US goods and was then hit with another 50 per cent by the US, bringing its cumulative tariff burden to 104 per cent. China continued retaliating and raised tariffs on the US to 84 per cent, which was met with an additional 125 per cent duty, taking the total to 145 per cent as of Friday (IST).

 

While Beijing has said it is open to dialogue, it insists that any negotiation must be based on mutual respect and equality. On Thursday (IST), the Chinese Commerce Ministry stated that “pressure, threats, and coercion” are not the right way forward.

 

On Wednesday (US local time), Donald Trump praised Chinese President Xi Jinping, calling him a “smart man” who “loves his country” and “knows exactly what needs to be done.” Trump also said he hoped to avoid further tariff hikes on China, but the White House maintained that pressure on Beijing is far from over.