Tesla's (ticker: TSLA) share price recently fell to a multi-week low, mainly due to slowing sales in the Chinese market and a new round of local price cuts, highlighting the challenges it faces in the world's largest auto market.。

According to preliminary data from the China Passenger Car Market Information Association (CPCA), Tesla delivered 60,365 vehicles at its Shanghai superplant in February, down 16% from the previous month and 19% from the same period last year, the lowest level since December 2022.。Tesla's Shares Drop 7 at Close.16%, reaching its lowest close since February 13。

It is worth noting that China's Lunar New Year holiday will lead to a nationwide stagnation of economic activity for nearly two weeks, and this year's Lunar New Year coincides with February.。As a result, economic activity and sales performance are typically relatively weak in February.。In addition, Tesla typically uses the early months of each quarter to boost deliveries outside of China, significantly boosting deliveries for domestic sales at the end of the quarter.。

However, the drop in Tesla deliveries to their lowest level in a year remains a concern, especially given the company's view of China as a huge potential growth market.。Even BYD, which leads the electric car market in China, saw its February sales plummet from 193,655 to 122,311, a 37% drop.。

China is currently the world's largest market for electric vehicle sales, but the recent slowdown in demand for electric vehicles has led to a new round of price-cutting competition among local automakers at the beginning of the year, and Tesla has also been affected.。

Deutsche Bank analyst Emmanuel Rosner noted in a report released on Monday (March 4) that Tesla recently introduced new sales incentives for mainland Chinese consumers, including "a price reduction equivalent to approximately $4,800 for customers who purchase Model 3 and Model Y inventory vehicles by the end of March."。

Rosner also said that these new incentives include insurance discounts, car paint modification discounts and Model Y's preferential financing package.。These latest incentives came after Tesla cut the prices of the Model 3 and Model Y by 5 percent each in January..9% and 2.Introduced after 8%。

China's electric vehicle market is highly competitive, and Tesla is forced to cut prices and reduce deliveries.。However, at least from another perspective, the competitive threat from BYD is unlikely to materialize in Tesla's U.S. home market.。

In this context, Stella Lee, Executive Vice President and CEO of BYD Americas, said: "We do not intend to enter the US market.。She added: "It's an interesting market but it's very complex.。"

In addition, there are reports that BYD will use the Mexican factory to export electric vehicles to the United States to avoid being punished by tariffs under the U.S.-Mexico-Canada Agreement, and the market is increasingly concerned about BYD's entry into the U.S. market.。