There has been a lot of reporting about how much China demand has softened (or completely collapsed depending on the source), and no doubt recent insured vehicle reported numbers have been less than ideal, particularly from an investor standpoint. I've seen so many declare that there is no demand, customers want more luxury, they don't see Tesla as premium, etc. But I've not actually seen any data that points to a consumer centric reasoning for the decline, just a bunch of broad platitudes.
As it so happens, I just spent the last two weeks in mainland China (Guangdong) as well as Hong Kong and it was amazing to see the amount of Tesla's driving around. Many had lots of customized wraps and modifications that created a lot of visual variation and creativity. Generally speaking, in China/Hong Kong you could lump all vehicles into three buckets: Chinese brands, German brands, and Tesla. I was looking forward to seeing some of the Chinese brand EVs in person, but Xpeng, Nio, and Wuling were few and far between. BYD was most prominent of any brand aside from Tesla, but not from a BEV standpoint. Many were older cars with the full "build your dreams" spelled out on the trunk, which just felt quite lame. Across all other new vehicles I observed, it's easy to see the design influence that Tesla has had across the market.
While taking an Uber in Hong Kong, my coworkers and I got to experience a new Model 3 Highland. One of my coworkers has a strong interest in EVs (although he does not own one currently) and has frequently chatted with me to discuss the market and more specifically, Tesla. We were both really excited to be in a Highland for the first time and my coworker took the opportunity to ask our driver about it. Our driver had previously owned an older Model 3, which he loved and thought was an amazing vehicle. Model 3 Highland, according to him, is the best vehicle. It's quieter, the suspension is better, the ride is smooth, and still no one comes close from a digital computing standpoint. The driver bemoaned the Hong Kong government for lack of charging infrastructure (his car park has chargers, but many do not) but says it is worth it regardless. Knowing that BYD is a hot brand topic in the USA, my coworker asked the driver what he thought of BYD and their vehicles. The driver responded by saying "BYD is not popular, no one wants to drive a BYD." He proclaimed that the Seal is their only "okay" car and that's just because "a German magazine gave it an okay review." He continued on, "the local brands are crazy, I don't trust it. I don't like the design. I don't like the car. Tesla. Tesla is the way. If people here want to buy a car, you buy a Tesla."
While this is the view of one person, I found the conversation to provide perspective that often isn't appreciated or considered with regards to the Asian consumer. I was afforded another unique local perspective later on my trip while in Guandong. I was being transported by the son of a factory owner, who had just spent the last 7 years in the USA for undergrad and graduated education. He only recently returned to China at the insistance of his father, and wanted to maintain as much "American lifestyle" as he could. This included three things: drinking Smartwater, buying steaks from Sam's Club, and driving. He drove some top tier trim level of a BMU SUV and asked me what I drove. When I responded that I drove a Tesla Model Y, he perked up and exclaimed how cool and highly regarded Tesla vehicles were. He asked me many questions questions about ownership, cost savings, the typical conversations we all have about our EVs.
While this is all anecdotal, in my personal experience, the claims that the Chinese consumer no longer values Tesla vehicles seem at a minimum, exaggerated, and perhaps false altogether. Meanwhile, the suggestion that BYD is highly regarded and could pose a threat to Tesla if allowed in the states, seems suspect. BYD is not a highly regarded brand in China, it is a budget brand. It's not coveted as premium vehicle, but seen as an option if you do not have much money to spend. Should BYD be allowed to sell in the USA, its hard to see how they would be able to shake this perception and actually compete model v. model against Tesla.