According to data released Thursday by the China Passenger Car Association (CPCA), Tesla’s combined January and February sales of vehicles produced at its Shanghai Gigafactory rose more than 35% year-over-year, reaching 127,728 units, up from 93,926 in the same period last year. The figures were adjusted for the seasonal slowdown caused by the two-week Chinese New Year holiday in mid-February.
The Shanghai factory, which produces the Model 3 and Model Y for domestic buyers and overseas markets across Europe, the Asia-Pacific, and elsewhere, remains one of Tesla’s most important production hubs. Despite the growth, Tesla’s combined China-made sales were still second only to BYD, which reported a 36% decline in deliveries during the same period.
BYD overtook Tesla as the world’s largest EV seller on a calendar-year basis for the first time in 2025. While Tesla’s sales recovery demonstrates that demand for its vehicles remains robust—its China-made output is more than double that of the next domestic competitor, Leapmotor—the company still trails BYD in both domestic and international markets.
European markets also reflected Tesla’s resilience. Reuters reported last week that new registrations of Tesla EVs across the continent rose in February, most of which were exported from the Shanghai factory.
Stiff Competition from BYD and Domestic Rivals
Despite the rebound, there is little evidence that Tesla is poised to close BYD’s growing lead. The Shenzhen-headquartered automaker recently unveiled its new Blade battery, capable of charging from 10% to 97% in just nine minutes, which has drawn critical acclaim and addresses long-standing concerns over EV range.
BYD’s expanding global presence further strengthens its position. In February, its overseas sales exceeded domestic deliveries for the first time, providing a buffer against rivals that cannot match its export scale. “BYD’s hedge is exports — [the company’s] overseas sales crossed 1 million units in 2025 for the first time, a buffer purely domestic rivals can’t match,” said Leon Cheng, head of mobility practice at management consulting firm YCP.
Other Chinese automakers are also intensifying competition by offering more diverse features at lower prices. In February, Geely’s Xingyuan emerged as China’s top-selling car model, surpassing Tesla and BYD, while in January, Xiaomi’s YU7 SUV dethroned Tesla’s Model Y as the best-selling vehicle in the domestic market.
The CPCA noted that finalized sales for March could provide a clearer picture of the broader EV market’s trajectory. “As various industries quickly return to normal operations after the Spring Festival holiday, the month-on-month growth in production and sales in March will be quite rapid,” the association said. It added that the post-holiday period is “a crucial time for new product launches, with many manufacturers releasing a large number of new models.”