Tesla made nearly a fifth of its annual revenue in China in 2020 thanks to booming sales. However, the company is facing regulatory scrutiny in the world’s largest auto market.
The electric carmaker’s sales in China rose to $6.66 billion last year compared to $2.97 billion in 2019, according its detailed financial report published on Monday. Sales in China accounted for around 21 percent of the company’s total revenues of $31.54 billion.
China is Tesla’s largest market after the US. Sales in the US increased to $15.21 billion in 2020 from 12.65 billion a year earlier.
The American carmaker started delivering vehicles produced at its Gigafactory in Shanghai in 2019 as it tried to boost its presence in the lucrative market amid the escalating US-China trade war. The Chinese government has been supportive of the factory, which became the first wholly foreign-owned car plant in China. Tesla is even exempt from a 10-percent purchase tax in China, and will enjoy lower taxes until at least the end of 2023.
However, the electric carmaker now faces obstacles from Chinese regulators. Tesla was summoned over reported quality issues, as consumers complained about battery fires, unexpected acceleration, and failures in over-the-air software updates.
In response to officials’ warning to abide by Chinese law and ensure the quality and safety of its products, Tesla said that it accepted the guidance and promised to investigate consumer complaints.
Despite Tesla’s strong 2020 results in China, this year got off to a bumpy start. Sales dropped in the first month of the year, with less than 15,500 vehicles sold compared to over 23,800 in December, according to the China Passenger Car Association. This has allowed Tesla’s competitors in China, Nio and Xpeng, to narrow the gap in the electric car market.
For more stories on economy & finance visit RT’s business section