Tesla is struggling with a slump in sales in China

The electrical manufacturer Tesla is struggling with a slump in sales in China. According to a report by the China Car Passenger Association (CPCA), recent numbers suggest the company is losing ground in the world's largest market for conventional and electric vehicles. In July, Tesla sales in China fell to 8,621 vehicles in July. According to the retail group, this corresponds to a decrease of almost 70 percent compared to June. On the contrary, the export of vehicles built in Shanghai jumped to 24,347 vehicles in July, compared to 5,017 in June. That means that total sales of Teslas built in China have declined by less than one percent overall. Tesla is facing growing problems in China. On the one hand, the company is grappling with increasing competition from Chinese electric car manufacturers. On the other hand, the electric car maker is suffering from a number of negative headlines. At this year's auto show in Shanghai, for example, criticism of the quality of the vehicles was loud and various safety deficiencies were complained about. CNN Business quotes an analyst who is one of the company's fiercest critics: Tesla accounted for just 3.9 percent of battery electric vehicle sales in China in July, up from 12.6% in June. "Overall, it now seems clear that Tesla has overestimated Chinese capacities compared to domestic demand, which will lead to further price reductions and margin pressure," the website quoted Johnson. "Given that China is supposedly Tesla's 'growth market', those numbers should worry any Tesla bull." However, Tesla investors appeared unimpressed by the drop in sales, with stocks falling less than one percent on Tuesday. After similar weak reports from the CPCA in April and May, prices had fallen much more sharply. "I think investors are becoming less sensitive to the China numbers from month to month," CNN Business quoted Wedbush Securities' tech analyst Dan Ives as saying. "Ultimately, they're not the best indicator of Tesla's success as we saw in the second quarter. But Ives said if Tesla's sales in China don't improve, the company could face serious problems in the future.