Here's your Forbes Daily Briefing for Friday, March 28th.

Today on Forbes, things are bad at Tesla. They're about to get much worse.

Tesla is in a world of hurt. Sales in California, its main market in the U.S., plummeted 31% in January from a year ago.

European numbers are even worse, dropping 43% in the

year's first two months. And in China, by far its most important market for profitability,

Tesla sales crashed 29% through February. Its stock has tanked, dropping 34% this year. A backlash has grown against part-time CEO Elon Musk,

who also leads five other companies, with protests at Tesla stores and the torching of vehicles

as he carries out a clumsy attempt to slash government workers in spending as Trump's doge master.

But things are about to get worse.

Following sales indicate that the company's financial health is fundamentally faltering as competitors are surging, particularly rival B.YD.

The Chinese EV and battery maker for the first time topped Tesla in revenue in 2024

and is on pace to leave it in the dust as the global leader

in electric vehicle sales this year. Tesla's brand is becoming toxic in California, which has

nurtured it since the roadster arrived in 2008. It's even failing on the technology front, with

BYD outpacing it with a super-fast charging battery system, and Waymo dominating in self-driving

cars, which Musk has bet the company on. The worst by far, though, is what's happening to Tesla

in China, where it opened its Shanghai plant in 2019. That plant, the first in China wholly owned

by a foreign carmaker, marked a turning point for Tesla, fueling

a massive sales spike and pushing it into the black consistently thanks to low-cost

Chinese labor, parts, and logistics. But a decline in that market, where Tesla has seen

consistent growth up until this year, threatens to narrow its already shrinking profit margins.

A big reason for slower sales

...