June Sales Edge Up After Long Slump
Tesla’s China-made EV sales rose 0.8% year-on-year in June, ending an eight-month losing streak. According to data from the China Passenger Car Association (CPCA), deliveries of Model 3 and Model Y vehicles produced at its Shanghai Gigafactory—including both domestic sales and exports—grew 16.1% from May to 71,599 units.
Tesla China also reported that sales in June jumped 59% from May to 61,000 vehicles for domestic deliveries alone, indicating a strong month-on-month recovery. However, on a quarterly basis, sales of China-made EVs slid 6.8% from a year earlier, marking the third consecutive quarterly decline.
Competitive Pressure Intensifies
While Tesla recorded its fastest-ever production ramp-up earlier this year—bringing the refreshed Model Y to full production in just six weeks at its Shanghai plant—the company's growth is slowing in the face of fierce competition from local brands.
BYD, Tesla’s largest rival in China, posted an 11% year-on-year sales increase in June, selling 377,628 vehicles globally. Analysts expect BYD’s global EV sales to grow 45% this year, accounting for roughly one-fifth of the world’s total EV sales.
Meanwhile, Xiaomi, the smartphone giant turned automaker, has seen strong demand for its new EV offerings. The SU7 sedan has outsold Tesla’s Model 3 on a monthly basis since December. Its newly launched YU7 SUV, priced nearly 4% below Tesla’s Model Y, received particularly strong initial orders.
Price Strategies and Market Outlook
Despite speculation that Tesla might cut prices further in China to defend market share, the company instead raised the price of the long-range Model 3 by 3.6% this week, while also boosting its range by 40 km to 753 km (468 miles).
Tesla’s China-made vehicles accounted for over half (51.3%) of its global deliveries in the first quarter of the year, underscoring the market’s importance. However, with growing competition and signs of cooling demand in both China and Europe, the company is expected to report another quarterly decline in global deliveries.
For the full year 2025, research firm Counterpoint expects Tesla’s global EV sales to drop by 10%, reducing its share to 13% of the global market. In contrast, BYD is forecast to hit record sales, reinforcing the competitive dynamics in the world’s largest EV market.