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Tesla and NIO sales suffer in China as bumpy economic conditions continue

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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.*

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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).

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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. 

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Christian Prenzler is currently the VP of Business Development at Teslarati, leading strategic partnerships, content development, email newsletters, and subscription programs. Additionally, Christian thoroughly enjoys investigating pivotal moments in the emerging mobility sector and sharing these stories with Teslarati's readers. He has been closely following and writing on Tesla and disruptive technology for over seven years. You can contact Christian here: christian@teslarati.com

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Tesla just unlocked sales to 50,000+ government agencies

It marks a significant step in expanding Tesla’s presence in the public sector, where procurement processes have traditionally slowed electric vehicle adoption.

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Credit: Patrick Bean | X

Tesla just unlocked sales to over 50,000 government agencies by entering a new agreement with Sourcewell, a purchasing cooperative.

Tesla entered a new master purchasing agreement with Sourcewell, the largest government purchasing cooperative in the U.S. This will enable streamlined sales of its EVs to more than 50,000 U.S. public entities. Tesla entered Designated Contract 0813525-TES, and the agreement covers Model 3, Model Y, and Cybertruck, and potentially other vehicles the company could release.

It marks a significant step in expanding Tesla’s presence in the public sector, where procurement processes have traditionally slowed electric vehicle adoption.

The deal allows eligible agencies, including cities, school districts, state governments, and higher-education institutions, to purchase Tesla vehicles directly through Sourcewell without conducting their own lengthy competitive bidding or request-for-proposal (RFP) processes.

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Pricing is pre-negotiated and capped, providing transparency and predictability. Agencies simply register for a Sourcewell account online or by phone and place orders under the existing contract. This cooperative model aggregates demand across thousands of members, reducing administrative costs and time while ensuring compliance with public procurement rules.

For Tesla, the agreement removes major barriers to government fleet sales. Public-sector procurement cycles often stretch 12 to 18 months due to bidding requirements and committee reviews.

Tesla buyers in the U.S. military can get $1,000 off Cybertruck purchases

By securing the master contract, Tesla gains immediate, simplified access to a massive customer base that previously faced friction in adopting EVs. The company highlighted in its announcement that the partnership will help these 50,000-plus agencies “save thousands of $$$ in operating costs for their vehicle fleet over time” through lower maintenance, energy efficiency, and the elimination of tailpipe emissions.

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The initial four-year term runs through November 13, 2029, with options for up to three one-year extensions, offering long-term stability for both parties.

Sourcewell’s role is central to execution. As a cooperative purchasing organization, it negotiates and manages vendor contracts on behalf of its members, then makes them available nationwide. Participating entities contact Tesla’s dedicated fleet team or Sourcewell representatives to complete purchases, bypassing redundant paperwork.

This structure accelerates fleet electrification while maintaining fiscal accountability—agencies receive pre-vetted pricing and terms without reinventing the wheel for each vehicle order.

The partnership positions Tesla to capture a larger share of the public fleet market, where total cost of ownership often favors electric vehicles once procurement hurdles are removed.

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For government buyers, it translates to faster deployment of sustainable fleets, reduced long-term expenses, and alignment with environmental mandates. As more agencies transition, the contract could contribute to broader EV infrastructure growth and taxpayer savings across the country.

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Elon Musk

How much of SpaceX will Elon Musk own after IPO will surprise you

SpaceX’s IPO filing confirms Musk will maintain his voting power to make key decisions for the company.

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Rendering of Elon Musk overlooking a Starship fleet (Credit: Grok)

Elon Musk will retain dominant voting control of SpaceX after it goes public, according to the company’s IPO prospectus that was filed with the SEC. The filing reveals a dual-class equity structure giving Class B shareholders 10 votes each, concentrating power with Musk and a handful of other insiders, while Class A shares sold to public investors carry one vote.

Musk holds approximately 42% of SpaceX’s equity and controls roughly 79% of its votes through super-voting shares. He will simultaneously serve as CEO, CTO, and chairman of the nine-member board after the listing. Beyond that, the filing includes provisions that may limit shareholders’ influence over board elections and legal actions, forcing disputes into arbitration and restricting where they can be brought.

The case for Musk holding this level of control is grounded in SpaceX’s actual history. The company’s most important bets, from reusable rockets to a global satellite internet constellation, were decisions that ran against conventional aerospace thinking and would likely have faced resistance from a board accountable to investor gains. Fully reusable rockets were considered economically irrational by established industry players for years. Starlink, which now generates over $4 billion in annual operating profit, was widely dismissed as financially unviable when it was proposed. The argument for concentrated founder control seems straightforward, and the decisions that built SpaceX into what it is today required someone willing to ignore consensus and absorb years of losses.

SpaceX files confidentially for IPO that will rewrite the record books

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For context, Musk’s position is significantly more dominant than Zuckerberg’s at Meta. The comparison with Tesla is also worth noting. When Tesla did its IPO in 2010, it did not issue dual-class shares. Musk has only recently pushed for enhanced voting protection, proposing at least 25% control at Tesla in 2024 after selling shares to fund his Twitter acquisition left him with around 13%.

SpaceX has clearly learned from that experience and structured the IPO differently by planning to allocate up to 30% of shares to retail investors, roughly three times the typical norm for a large offering. The roadshow is expected to begin the week of June 8, with a Nasdaq listing rumored to be a $1.75 trillion valuation and a $75 billion raise.

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Tesla bolsters App with new safety, insurance, and storage features

The Tesla Smartphone App is one of the biggest and best features and advantages owners have. Everything from moving the vehicle with Summon, to getting Navigation sent to the car, to preconditioning the cabin can be done with the Tesla App.

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Credit: Tesla

Tesla is bolstering its smartphone App with a series of new features to streamline operations for owners. The new additions include fixes to safety, its in-house insurance offering, and storage management for Dashcam clips.

The Tesla Smartphone App is one of the biggest and best features and advantages owners have. Everything from moving the vehicle with Summon, to getting Navigation sent to the car, to preconditioning the cabin can be done with the Tesla App.

But in classic Tesla fashion, the company is aiming to improve the offerings of the app, and it is doing so with a handful of new features. They were first discovered by Tesla App Updates.

Tesla Insurance – Safety Score 3.0

This is truly part of the Spring 2026 Update, but Tesla has now given more transparency on how FSD has saved people money on their premiums.

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Tesla intertwines FSD with in-house Insurance for attractive incentive

Additionally, Tesla is now automatically awarding a Safety Score of 100 for every mile traveled on Full Self-Driving (Supervised).

Update Tracking

Updates traditionally appear on the App or on the Center Touchscreen in the car. There is nothing better than seeing that Green Arrow at the top of the screen, or opening your app and seeing that there is a Software Update available.

Now, there will be no need to manually check the app and initiate the download. Tesla is enabling a new feature that will automatically download updates for you.

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Storage Management

Your USB drive can now be remotely formatted, and old Dashcam clips can be deleted straight from the phone. When you record a lot of things using the Dashcam feature, that storage fills up pretty quickly.

Now, manually deleting the Dashcam videos is easier than ever.

Trailer Light Test

This is perhaps the coolest and most crucial addition to the Tesla App, as those who tow and haul will now be able to trigger a diagnostic light sequence from the app while standing behind your trailer to ensure the brake lights work.

Verifying your trailer lights are connected properly and operating normally and as intended is normally a massive hassle.

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Now, a new trigger will be available to initiate a diagnostic light sequence directly from your phone.

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