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Tesla and NIO sales suffer in China as bumpy economic conditions continue
It’s no secret that the tensions between the US and China are high, but now it appears to be affecting the rapidly-growing country’s EV market. Don’t get me wrong, China’s EV sales still put the US to shame, more than 45,197 all-electric vehicles in sold April alone. But the more notable portion of that news? Pure EV sales fell 4% compared to the stellar 2018 sales (I’m excluding plug-in hybrids on purpose).
There are a couple of reasons for the speed bump in EV sales growth. First, are the massive changes happening to Chinese NEV (new energy vehicles, which includes plug-in hybrids) subsidies. Second, as mentioned above, the macroeconomic effects from US-Chinese relations. The system for Chinese NEV subsidies is incredibly complex, and I’m not going to pretend to know all the system’s ins and outs. But it’s worth pointing out a few differences from more traditional tax rebates or credits. Tesla doesn’t currently earn any subsidies from their sales in China, their future Chinese-built Model 3s would be eligible for subsidies.*
Only cars made in China are eligible for these subsidies. Tesla has never had access to them.
— Elon Musk (@elonmusk) June 3, 2019
One of the major differences between the US’ federal tax rebate system and Chinese subsidies lies with the redemption process, or lack thereof. Rather than putting the responsibility on consumers, the Chinese government requires all manufacturers to factor in subsidies into sales prices, then request payment from the government. This process is incredibly beneficial to consumers, allowing them to realize the price reduction immediately, but causes many automotive companies troubles. The subsidy request process in China can take up to a year for automakers to be reimbursed, straining their balance sheets and hurting their cash flow.
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This subsidy request process doesn’t cause a huge threat to large established companies, who have strong cash flows from their ICE sales (see, BYD). But for small companies like Tesla and NIO, these sort of subsidy structures can put them at a disadvantage compared to their peers. In fact, NIO’s VP of Quality, Feng Shen, recently told me that he believed that the reduction of subsidies will help NIO in the long term. Tesla’s Musk has echoed this premise with US subsidies (ZEV credits and consumer tax credits)— allowing all companies to compete on a more equal playing field.
While Shen might be right, NIO and Tesla’s sales appear to be taking a hit in part to subsidy reductions. NIO reported only 1,124 sales of the ES8 in April, with a total of 5,113 in the first four months of 2019. However, NIO stated that the ES8 has outsold the Tesla Model X 2:1 in the same four months, indicating ~2,500 sales (foreign-built vehicles aren’t required to report sales figures). While Tesla doesn’t report regional sales figures, NIO’s statements about the ES8’s lead over the Model X hints at the increasing competition in China’s premium all-electric SUV segment.
It’s nearly impossible to tell if macroeconomic conditions or subsidies are playing a bigger role here, but I’d say its safe to assume its a mix of the two are hurting NIO’s sales (Tesla’s US-built vehicles aren’t eligible for subsidies). I wouldn’t say this slump in EV sales is an indicator of long-term demand in the world’s largest automotive market, but both Tesla and NIO have placed large bets on huge demand. Tesla’s Shanghai Gigafactory is well under construction and the company is expecting huge demand for their lower-cost Model 3, which is priced at RMB 328,000 (~$47,400).
But for NIO, the company is feeling the pressure. Unlike Tesla, China is the company’s sole market and they are burning cash quickly ($390M in Q1). To cut their cash burn NIO has been remarkably reactive, cutting costs by an impressive (obviously not to some) 25% in Q1 and focusing on launching their second (lower-cost) vehicle, the ES6. The company isn’t ready to revise its 2019 guidance (35-40K vehicles) yet, but is cautiously watching the Chinese market.
With the world’s largest auto market hitting a speed bump, the entire industry is on pins and needles, watching and waiting for a recovery. When do you think the Chinese EV market will bounce back? Do you think Tesla and NIO are over-investing in China?
*Update: An earlier version of this article indicated that Tesla’s vehicles were eligible for China’s NEV subsidies. Only NEVs built in China are eligible for these subsidies and Tesla may benefit from them in the future with their Chinese-built Model 3.
Tesla Cybercab might have just rolled out to the public as it entered the company’s Robotaxi suite in Austin this past week. However, the vehicle might already be on its way to becoming even better, as the company is asking riders to describe what they’d like to see improved with the Cybercab.
Tesla sent a rider experience survey to Cybercab passengers only days after paid rides began in Austin. The questionnaire asks how satisfied riders were with the overall trip. Then it requests star ratings for availability and wait time, door functionality, vehicle touchscreen, mobile app experience, seat comfort, interior space, ride comfort, cleanliness, and cargo space.
A later section asks which features riders would most like to have and allows selection of up to three items from a list that includes heated seats, ventilated seats, fully reclining seats, a tray table, a wireless phone charger, a better sound system, and more storage. Respondents may also choose none of these or write in another idea. The survey closes with a recommendation score from zero to ten.
Tesla just sent out a Cybercab rider experience survey so you can give feedback to the team. pic.twitter.com/YsU5OYdAjW
— Sawyer Merritt (@SawyerMerritt) September 8, 2026
This rapid request for input illustrates Tesla’s habit of treating early users as collaborators rather than mere customers. The company has long refined vehicles through software updates and hardware changes informed by real-world use across its passenger cars.
Collecting structured opinions so soon after commercial service started shows the same mindset applied to a purpose-built autonomous taxi. The questions themselves reveal an openness to cabin changes even after the first vehicles reached public streets, which is no surprise.
Tesla has always hoped to cater a great experience to anyone in its vehicles, which is why so many fan-requested features have made it into its vehicles.
Replies already circulating online favor reclining seats, tray tables, wireless charging, improved audio, and extra room when seats fold back.
Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash
Those preferences point toward comfort upgrades that Tesla can implement in later production batches or through cabin revisions. Because the Cybercab is designed around software first principles, many requested amenities can arrive faster than in traditional automakers.
Tesla’s willingness to survey riders immediately after launch therefore makes near-term cabin and experience improvements likely as the team reviews responses and iterates toward a more refined robotaxi people will choose daily.
Tesla Cybertruck Lead Engineer Wes Morrill revealed the company has made several changes to the all-electric pickup, which he calls a “living thing, constantly evolving and improving.”
Cybertruck is manufactured at Tesla’s Gigafactory Texas just outside of Austin, and over the past few years, Tesla has continued to make small changes to the pickup to improve everything from cost, reliability, serviceablility, and manufacturability.
“The finish line isn’t getting to production. A product is a living thing, constantly evolving and improving,” Morrill added.
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Some of those changes are yet to be revealed, but perhaps the most notable one was the change Tesla made to the aero shield that sits underneath the truck. In the past, it was aluminum, but now the Cybertruck is using a self-reinforcing polypropylene.
Morrill said that the polypropylene is “stretched into fibers and then laminated into the form,” and is much more durable, much lighter, and significantly cheaper than aluminum when it is manufactured this way.
It also enabled some improvements in the geometry of the Cybertruck, improving the manufacturing around the bolts and edges, in addition to minor form changes. These all benefitted the Cybertruck in more ways than one: specifically with durability and improved drag.
I was surprised by how interested people were to find out we made a relatively benign change to the Cybertruck aero shield, a part of the car most people never even see. So I’ll share some more details.
Here are two photos, the left is one of the latest trucks off the… pic.twitter.com/F5cZo2CZKf
— Wes (@wmorrill3) September 7, 2026
Typically, Teslas are not necessarily identified by model year because these changes are fluid and occur when the company sees fit to implement them. It is not like other automotive companies, which usually make sweeping manufacturing changes when building a new model year.
Instead, Teslas are recognized by their “generation” or “era.” For example, those with a newer Model Y might refer to their car as a “Juniper.” This is the same with Model 3, as many refer to the new body style as the “Highland.”
Tesla’s manufacturing changes are proof of the company’s constant need to improve its products and move things forward with its vehicles. There is no need to drag one’s feet and wait until next year if the product can be made better right now, and that’s precisely what Tesla did with the Cybertruck.
Elon Musk
Tesla Cybercabs narrowly miss deadly Amazon cargo plane crash
An Amazon cargo plane crash near Miami’s airport stopped feet from dozens of Tesla Cybercabs.
An Amazon Prime Air Boeing 767 cargo jet overran the runway at Miami International Airport on Sunday afternoon, killing five people and injuring five more. The jet, operated by North Carolina based carrier 21 Air as Flight 7598, touched down around 2 p.m. after arriving from San Juan, Puerto Rico, then crossed the airport perimeter, plowed across NW 67th Avenue and struck multiple vehicles before catching fire, according to the Associated Press.
Photos and video from the scene show the aircraft’s nose stopped within meters of a fenced staging lot holding dozens of gold painted Tesla Cybercabs, the steering wheel free robotaxi Tesla began putting on public roads in Austin last week. Miami-Dade Fire Rescue has confirmed the plane struck “multiple vehicles” but has not said whether any Cybercabs were among them, and neither Tesla nor airport officials have addressed the fleet directly.
The Cybercabs had not yet entered commercial service in Miami. Tesla’s existing Robotaxi operation there runs on modified Model Y vehicles and has been unsupervised since Ashok Elluswamy confirmed the detail on X in July.
Footage of the plane crash from earlier today | #ONLYinDADE pic.twitter.com/iGoOtnd6cD
— ONLY in DADE (@ONLYinDADE) September 6, 2026
Elon Musk offered the briefest of reactions. Replying to a Zero Hedge post about the Cybercabs sitting so close to the wreckage, he wrote a single word: “Weird.” He has not commented further, and Tesla has not issued a statement.
The timing puts Tesla’s newest vehicle near an unrelated but highly visible tragedy just days after its Austin debut, a launch that had already drawn scrutiny from federal regulators. The National Highway Traffic Safety Administration opened an audit how Tesla certified the Cybercab as compliant with federal vehicle safety standards, a process Teslarati covered after the vehicle’s September 3 launch event. That inquiry concerns the car’s lack of a steering wheel and pedals, not the Miami crash.
Investigators from the FAA and NTSB are focused on the plane, not the parking lot beside it. Flight data reviewed by outlets including Simple Flying show the 767 touched down around 170 knots, well above the 135 to 140 knot range typical for the aircraft, though investigators have not determined a cause. Amazon said it is working with authorities and that its priority is the safety of everyone affected.
Whether any Cybercabs were damaged, and what Tesla plans for the fleet parked near one of the country’s busiest airports, remain open questions.
Tesla Cybercab improvements are already on the minds of company engineers
Tesla Cybertruck engineer reveals new changes in ‘constantly evolving’ pickup
