Tesla sends its former Asia head back to China as sales of its Shanghai-made EVs plunged 18% in April

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Tesla Inc. is sending executive Tom Zhu back to China, where he led the carmaker’s entry into the country, the Wall Street Journal reported.

Zhu, one of the company’s three named executive officers, was promoted to senior vice president of automotive in April 2023, a role in which he oversaw global production, sales, deliveries, service and the company’s factories from Tesla’s Austin headquarters. He previously had been based in China, heading the carmaker’s Asia Pacific operations.

The move comes as Tesla loses ground in China’s ultra-competitive electric car market. Deliveries from its Shanghai factory, which include domestic sales as well as exports, slumped 18% in April from a year ago to 62,167 vehicles, preliminary data from China’s Passenger Car Association showed late Tuesday. The decline came even as overall new-energy passenger vehicles wholesales were estimated at 800,000 units, up around 33% from a year ago.

Tesla is facing increased competition in China from the likes of BYD Co., which offers a broad range of vehicles including the popular budget Seagull hatchback, and new entrants like tech giant Xiaomi Corp., which has received more than 76,000 orders for its SU7 EV. The U.S. automaker slashed prices again across its range late last month to help boost sales. 

In a bid to revive his company’s fortunes in China, Tesla Chief Executive Officer Elon Musk made a surprise visit to Beijing in late April, receiving in-principle approval from government officials to deploy its driver-assistance system in the country.

A person with knowledge of the matter said that Tesla was granted the approval under certain conditions and managed to clear two important hurdles: reaching a mapping and navigation deal with Chinese tech giant Baidu Inc., and meeting requirements for how it handles data-security and privacy issues.

A China Daily report earlier this week said that Musk, during his recent visit, proposed testing the assisted-driving functions of its vehicles in China by deploying them as taxis. Sources indicated that the Chinese government may have offered partial support for this plan, China Daily said.

Tesla shares fell 3.8% in New York on Tuesday. After surging 15% following Musk’s Beijing visit, the stock has retraced more than half those gains, as the company deals with a myriad of issues—from sweeping job cuts to increased scrutiny of its Autopilot driver-assistance system in the U.S. 

The automaker has also seen a major staff shakeup in recent weeks. Musk announced the company would cut more than 10% of headcount globally amid a slowdown in EV sales. Several key executives have also left Tesla. 

Zhu has been based in Austin since late 2022, when he arrived to run the company’s newest plant. At one point last summer, he had 25 direct reports, including Troy Jones, Tesla’s head of North American sales. Zhu now just has 10 direct reports, almost all of whom are based in Asia, according to people familiar with the matter.

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