Tesla is relocating executive Tom Zhu back to China, where he initially spearheaded the company's entry into the country, The Wall Street Journal has reported. 

Zhu is the current senior vice-president of Tesla and was previously based in China, overseeing the carmaker's operations in the Asia-Pacific region. 

This relocation was decided due to Tesla's declining sales in China's fiercely competitive electric car market, with deliveries from its Shanghai factory dropping by 18% in April compared to the previous year, amounting to 62,167 vehicles, according to preliminary data noted by Reuters.

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Why Are Tesla's Sales Down In China

Tesla's sales are down in China due to increased competition from domestic electric car manufacturers like BYD and newcomers like Xiaomi. 

However, the EV company has attempted to stimulate sales by reducing prices across its product range. 

Recently, VCPost reported that Elon Musk visited Beijing and secured approval from government officials to introduce the company's driver-assistance system in China, overcoming major regulatory hurdles, which resulted in a 3.8% decline in New York.

This also coincides with the waning investor confidence in Tesla due to massive workforce reductions over the past few months and heightened scrutiny of its Autopilot system.

With Zhu's return to China, Tesla hopes to address and improve its regional market challenges.

READ MORE: Tesla Raises Prices in China While Local Chinese EV Makers Lowered Theirs