Apple, Tesla Earnings Reports Show An Increasing Reliance On China As A Market

Tesla’s Model 3 and Model Y were among top-selling electric vehicles in China in February, but they face tough competition from local firms such as Nio Inc (NIO), Xpeng Inc (XPEV), and budget car makers like Wuling — a partnership between General Motors Company (GM) and state-owned SAIC Motor.

Apple too faces increasing competition from Chinese manufacturers. It was the second-largest smartphone manufacturer in the first quarter of 2021, as per a report from Strategy Analytics, and held 17% of the market share. The topper in the segment was Samsung Electronics Co. with a 23% market share.

However, China’s Xiaomi Corporation (XIACF) is creeping up and has garnered 15% of the market to take the third spot. Not only that, other Chinese manufacturers are ranked at no. 4 and no. 5 spots.

In December, the iPhone maker removed thousands of video games from its App Store in order to comply with Chinese government regulations and came under fire for bowing to the Communist country’s demands. 

Another pitfall of reliance on the Chinese market is regulatory risk emanating from the U.S. Last year, former President Donald Trump issued an executive order banning U.S. companies from doing business with WeChat, a Tencent Holdings Limited TCEHY application

At the time, many Chinese fans of iPhones reconsidered their loyalties because should the ban have impacted the Chinese version of WeChat, the phones would have effectively be rendered useless given the domination of WeChat in the daily life of the people in China.

Tesla has had its own share of controversies in China. This month, a woman who claimed her family almost died in an accident involving a Tesla vehicle protested at the company’s booth at the Shanghai Auto Show.

Last month, China restricted military and state personnel use of Tesla vehicles citing national security concerns after suspicions were raised over car sensors’ ability to record images of surrounding locations.

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© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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