Tesla’s sales there appear to be suffering, according to a new report, leaving investors worried. The market leader in electric cars sold fewer than 26,000 cars in China in the first half of the year, down from a year ago and the lowest level in more than a decade, figures from the China Passenger Car Association show. The decline came despite improved sales of its Model S and Model X electric cars domestically.

The Shanghai Gigafactory, where Tesla benefits from tax breaks from local governments, has allowed the automaker to locate sourcing and production, driving down prices for products like the Model 3.

China gave Tesla $6.66 billion in sales last year, more than double the year before, and accounts for about a third of the company’s total U.S. sales. Tesla competes with other well-funded start-ups with cars such as China’s Nio and Xpeng, both of which are listed in the US, but Tesla boss Elon Musk has denied that they cost him money. The Chinese government fears that their cars could be used for spying. They have been so closely scrutinized that the Chinese army has banned Tesla cars from entering its complex and raised problems with cameras on board.

Tesla has halted plans to buy land to turn its Shanghai plant into a global export hub, and its sales there appear to have suffered, raising investor concerns. Tesla did not respond to a request for comment on the impact of China’s crackdown on its business in the US. In addition, news of a second-quarter loss of $1.2 billion weighed on Tesla shares on Tuesday.

According to figures from the Chinese Passenger Car Association, the electric car driver sold fewer than 26,000 cars in China in the first half of the year, down from the same period last year.

According to figures from the China Passenger Automotive Affiliation, the head of electric car manufacturing offered fewer than 26,000 cars in the first half of the year. The decline comes despite improved sales of Tesla’s Model S and Model X electric cars domestically.

Here we get the decline from the reported improved home sales, but Tesla is aware that some of its homeowners complain about problems with the automobile.

In addition, the company had five Chinese regulators question its Shanghai – made mannequin, a high-end electric vehicle with a range of more than 1,000 miles.

Musk was quick to respond to the China concerns, saying during the phone call that concerns about Tesla’s China business were exaggerated. Musk also said the company is releasing a major software update for its cars in China that will help improve the customer experience in the future.

This includes the addition of maps and directions that were previously missing from vehicles on the market, as well as the introduction of a new navigation system.

Xpeng is one of other Chinese electric vehicle manufacturers that have recently reported signs of improving gross margins, but short sellers are betting that the valuation is above potential. Shanghai-based Nio has a valuation of more than $1.5 billion, about double that of Tesla four years ago. Unit sales increased 18% sequentially to 12,206, and sales increased 22% to 666.6 million dollars, the report said.

Bank of America, Deutsche Bank and JPMorgan have all raised their price targets for Nio shares, with Bank of America saying it now expects Nio to be profitable in the second half of 2017, rather than the first half of the year as previously forecast. Musk said the report was “absolutely quake” and that 20,000 orders had already been received in Europe.

In the case of China, Musk said Tesla is in the process of delivering Model 3 before the trade war triggers new tariffs. He also said the company is currently focused on negotiating a deal with the Chinese government to put the Shanghai Gigafactory into operation. Pricing is already a challenge for non-Chinese automakers there and will continue to do so once Tesla puts them into operation – and – on track, he said. Tesla has had problems with early deliveries in Europe, but in China it has not been as bad as in the US and other parts of the world, and is “currently focused” on “working out an agreement” with the government to “put all Model 2s into operation” and “put the Model 4 into service.”

A video of the incident went viral after an angry customer climbed on top of a Tesla in a Model 3 with faulty brakes. Tesla has slipped into damage and control mode and has asked the online news portal to withdraw the report, the company said on WeChat on Tuesday. The incident escalated after some questioned whether the disgruntled customers, who are given the surname Zhang, acted alone, according to the article.

The official Xinhua news agency said Tesla’s apology was disingenuous and called for the removal of “problematic executives,” while the Global Times called Tao’s comments a lesson for foreign companies in China.