Tesla Inc., the Electric Vehicle (EV) giant, has closed its flagship showroom in China’s capital city Beijing, according to people close to the matter as reported by Reuters.
Due to lower traffic from Covid-19 restrictions by the Chinese government, Tesla decided to close its showroom in Beijing’s Parkview Green, sources said, citing high costs for the location.
Opened in 2013, the showroom in Beijing was Tesla’s first showroom in China, located in Beijing’s Parkview Green. The store was renovated in 2018 to expand on two floors of the mall.
Reuters confirmed after contacting the mall’s staff, who said that the contract with the mall had expired and Tesla did not extend the contract.
Reuters earlier reported that Tesla was considering closing some showrooms in flashy malls
Tesla’s CEO Elon Musk said earlier that his target is to give better service to his customers, but most of Tesla’s stores in China do not offer repair or maintenance services. The company is also located in high-rent locations where space is limited.
The company has cut prices of Model 3 and Model Y cars by as much as 9% in China, reversing a trend of price increases for electric vehicles in the industry amid signs of slowing down in demand in the world’s largest auto market.
In the first nine months of 2022, Tesla sold 318,151 vehicles in China, up 55% from a year earlier, according to the figure reported by the China Passenger Car Association. Meanwhile, the overall sales of electric and hybrid vehicles in China increased by 113.2%.