Tesla (NASDAQ:TSLA) Experiences Over 1% Decline in Premarket Trading

Tesla, Inc. (NASDAQ:TSLA) shares, which have been experiencing a fits-and-starts recovery from the extended slide seen since mid-July, are on the back foot in premarket trading on Monday.

China Sales Disappoint: Tesla sold 60,365 electric vehicles made in China in February, according to preliminary data released by the China Passenger Car Association, as reported by CnEVPost. The breakdown between exports and domestic sales will be available when the detailed report is released in a week.

Tesla’s February sales performance marked a 15.51% sequential drop from the 71,447 units sold by the Elon Musk-led company in China in January. On a year-over-year basis, sales were down 18.9%. Some of the weakness may be attributed to the timing of the Chinese New Year holidays this year, with the weeklong holiday running from Feb. 10-17 compared to Jan. 21-27 last year.

Last week, Chinese EV startups Li Auto, Nio, XPeng, and BYD reported their monthly deliveries. Warren Buffett-backed BYD reported a 39.42% year-over-year decline in pure battery EV sales and a roughly 49% sequential drop.

Nio, XPeng, and Li Auto also reported year-over-year and sequential declines in February deliveries, with the declines steeper than those reported by Tesla.

See Also: Everything You Need To Know About Tesla Stock

Why It’s Important: Troy Teslike, a user who tracks Tesla numbers, noted last week that Tesla is facing massive challenges with first-quarter sales. While highlighting a special promotion that Tesla ran for its U.S. customers through the end of March, he mentioned that the company has activated another demand lever and hoped it would be effective.

He issued a warning about quarterly deliveries, stating, “Over the last 3 years, Tesla sales in Q1 have been higher than the preceding Q4. That’s not going to be the case in this quarter.”

He also noted challenges in all major geographies. In the U.S., the company faced low Model 3 production at Fremont due to the Highland upgrade, low Cybertruck production, and soft demand for Model Ys. In China, challenges included the Chinese New Year and increased competition. He predicted that the cancellation of EU incentives would likely impact Tesla in Europe.

In premarket trading, Tesla fell 1.47% to $199.67, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next: Tesla’s Quarterly Deliveries At Risk? ‘There Are Massive Challenges With Q1 Sales,’ Says A Numbers Tracker