BEIJING, January 31  (TMTPOST)— Tesla’s rapid growth in China is cooling in the past year amid various headwinds from the Covid-19 lockdowns to supply chain disruptions.

Source: Visual China

Tesla posted revenue of $81.462 billion with a year-over-year (YoY) increase of 51% during 2022, of which $18.145 billion, or about 22.27% came from China, while $40.553 billion, or 49.78%, from the United States, its top market, according to a filing with the U.S. Securities and Exchange Commission (SEC) on Tuesday.

Tesla’s revenue from China experienced a significant slowdown in the year 2022. Proportion of revenue fell 3.45 percentage points in 2022 as China contributed 25.72% of the company’s annual sales a year earlier. Sales in China in 2022 increased 31.07% compared with the previous year, while the market saw more than 100% yearly growth in 2019 and 2020.  

By geographic area, Tesla’s sale in China became a major laggard as the YoY increase of around 31% is much less than the overall growth of 51%. Revenue from U.S. rose 69.09% in 2022 while regions excluding the country and China up 42.22%.

As of December 31, Tesla missed the market estimates of delivery for a third straight quarter. Its total delivery of about 1.31 million units for 2022 not only failed to meet its own annual target of 1.5 million, but also was overtaken by BYD, the Chinese EV maker that sold 1.86 million vehicles the year. The China Passenger Car Association (CPCA) estimated the annual delivery of Tesla Shanghai Gigafactory rose 48% YoY to more than 710,000 vehicles in 2022. However, Tesla’s outstanding performance in the country was at the cost of various forms of price war. The U.S. electric vehicle (EV) giant has launched five rounds of promotion including price cuts and various subsidies, such as to offer a one-time subsidy of RMB8,000 for qualified buyers’ final payment that announced in mid September.

Tesla intensified price war this year to boost demand. It slashed price by up to 13% in China on January 6, making the starting price of Model Y and Model 3 down to new low and about 43% and 30% cheaper than those on sale in U.S. Less than a week later, Tesla lowered prices across the U.S. Europe, the Middle East and Africa by as much as 20% on January 12, expanding its price war globally.

Tesla CEO Elon Musk expressed optimism at an earnings call last Wednesday. He noted recent price cuts triggered consumers’ interests and demand in January about doubled the production. He also said deliveries in 2023 could hit 2 million units.