Tesla winds down its flagship China store. Here's why

Tesla Inc. shut its flagship China showroom in Beijing last month, according to a person familiar with the matter. The US electric carmaker has a number of showrooms in China’s capital, and the one now shuttered was in a shopping center called Parkview Green, a mainly residential area. Reuters reported the closure earlier Wednesday.

Tesla largely sells its cars via a direct sales model over the internet rather than through dealerships or its own showrooms. China is its most important market after the US and it delivered a record 83,135 cars in September after upgrading production capacity at its Shanghai factory.

While Tesla leads the way for foreign carmakers in China’s EV market, other international automakers are starting to give chase and offering a wider product lineup. German carmaker Volkswagen AG sold 16,383 new-energy vehicles in September under its two local joint ventures.

There’s also growing competition from Chinese carmakers, like Warren Buffett-backed BYD Co., which notched up a seventh consecutive monthly sales record for electric and hybrid vehicles in September, selling just over 200,000 units for the first time.

EV sales in China are forecast to hit a record 6 million this year as demand for cleaner cars surges, the China Passenger Car Association said in August. Now, around one in four new vehicles sold in the nation, the world’s biggest car market, is electric.