As Tesla's sales in the Chinese market have sharply declined, Elon Musk, Tesla's Chief Executive Officer (CEO), is reportedly planning to dispatch Tom Zhu, the company's Chief Vice President, to China, according to The Wall Street Journal (WSJ) on the 7th (local time).
Vice President Zhu is one of the three top executives listed on Tesla's website alongside CEO Musk and Chief Financial Officer (CFO) Vaibhav Taneja. He has previously acted on behalf of CEO Musk in some duties. He also accompanied Musk during his surprise visit to China last month, meeting with high-ranking officials including Premier Li Qiang.
Vice President Zhu joined Tesla in April 2014 and has led Tesla's China operations, including the construction and operation of the Shanghai Gigafactory. In early 2022, when Shanghai was locked down due to the COVID-19 pandemic, he stayed at the factory with employees and partners to ensure work normalization. He has also led major projects such as the Cybertruck and was dispatched as a troubleshooter to Tesla’s Austin and Fremont factories in California, which were experiencing production issues. In 2023, he was promoted to Senior Vice President of the automotive division. Known for his exceptional problem-solving and goal-achieving abilities, he has earned the nickname "firefighter" within Tesla.
The reason CEO Musk is dispatching "firefighter" Vice President Zhu to China appears to be due to Tesla's weakening position in the Chinese market. Tesla is losing competitiveness in China, the world's largest electric vehicle market. It is being outpaced by Chinese companies like BYD, which are engaging in aggressive low-price competition, even at the cost of "bleeding competition." While electric vehicle sales in China increased by 15% year-on-year in the first quarter, Tesla's revenue decreased by 4%.
The situation was even worse last month. Tesla's sales in China in April were 62,167 units, down 18% year-on-year and 30% compared to the previous month. According to the China Passenger Car Association (CPCA), electric vehicle sales in China in April increased by 33% year-on-year but decreased by 2% month-on-month. BYD sold over 300,000 units, up 49% year-on-year and 3.45% month-on-month.
Additionally, Tesla must resolve issues related to the distribution of the "Full Self-Driving (FSD)" software and data transmission, which were approved by the Chinese government during CEO Musk and Vice President Zhu's visit to China.
The WSJ stated, "As Tesla faces difficulties in the Chinese market, it is dispatching Vice President Zhu," adding, "With CEO Musk aiming to reignite Tesla's growth globally amid a downturn, China is expected to play an essential role."
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