Tesla clocked a massive decline in the sales of its China-made electric vehicles in February. The automaker’s EV sales (manufactured in China) dropped to 30,688 units in the month, plunging 49.2 per cent from the same period last year.
This also marked the lowest sales figure recorded by the company since August 2022. The decline comes as the US firm faces increasing pressure from Chinese competitors in a continuous EV price war.
Tesla makes Model 3 and Model Y cars in China and sold 93,926 Chinese-made vehicles across the world in the first two months of the year. This figure stood 28.7 per cent lower from the year-ago period, reported Reuters citing data from the China Passenger Car Association (CPCA).
The company’s sales in the first two months of 2025 were disrupted by the Lunar New Year holiday shifting from February last year to late January this year. Further, it also had to partially suspend the production of Model Y production for upgrade work.
The company made the long-awaited update to its autopilot software in China in late February in hopes of increasing the appeal of its cars for Chinese consumers. This update is supposed to help the customers enable city navigation. It also began deliveries of the upgraded Model Y in what is considered to be the largest auto market in the world.
Chinese Carmakers Intensify Price War
At the same time, Chinese carmaker BYD managed to report a 90.4 per cent surge in passenger vehicle sales at 614,679 units last month. The company is famous for its Dynasty and Ocean series of EVs and plug-in hybrid vehicles.
BYD also launched smart EVs last month priced under $10,000, deepening a three-year-old price war in the Chinese auto market. This resulted in industry peers Leapmotor and Geely following with their own affordable smart EVs. Notably, smart EVs are equipeed with advanced driving assistance systems.
Both Tesla models manufactured in China are smart EVs. The American firm also exports its China-made EVs to markets such as Europe, which have also taken a hit as sales tanked 45 per cent in January.
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Tesla’s Brand Value Still High
In 2023 and 2024, Model Y remained the best-selling car in China, however, the Chinese carmakers have launched at least six new models in the last year to compete with their American rival.
While Tesla continues to benefit from the brand recognition in China, analysts have warned that Xiaomi’s YU7 crossover, expected to be launched later in the year, could emerge as the strongest competitor for the company.
