Tesla’s vehicle sales in China dropped sharply in May as mounting price competition from domestic electric vehicle (EV) makers weighed on demand. Retail sales fell 30.11% year-on-year to 38,588 units, despite a sequential rebound of 34.31% from April, data from the China Passenger Car Association (CPCA) showed on Sunday.
The drop marked Tesla’s fourth year-on-year sales decline in the country so far this year, with total domestic retail sales reaching 201,926 units from January to May — down 7.82% from the same period in 2023.
Analysts said intensified price wars led by local brands such as BYD (HKG: 1211) and Chery late last month likely pressured Tesla’s volumes. The U.S. carmaker’s Shanghai facility, which builds the Model 3 sedan and Model Y SUV, also serves as a key export hub.
In May, Giga Shanghai exported 23,074 vehicles, up 32.93% year-on-year but down 22.38% from April. Year-to-date exports dropped 33.40% to 90,949 vehicles, CPCA data showed.
Tesla’s market share in China’s booming new energy vehicle (NEV) segment also declined. In May, its share of the NEV retail market slipped to 3.78% from 6.87% a year earlier, while its battery electric vehicle (BEV) market share dropped to 6.36% from 11.15%. China’s NEV retail sales rose 28.14% in May to 1.02 million units.
Including exports, Tesla sold 61,662 vehicles from China in May, down 15.03% year-on-year, though up 5.48% from April. It marked the eighth consecutive month of year-on-year wholesale declines. From January to May, Tesla’s wholesale volumes in China totaled 292,875 units — a 17.64% drop from a year earlier.
Sales of the Model Y, Tesla’s top-seller in China, dropped 12.86% year-on-year in May to 39,527 units. Model 3 sales fell 18.66% to 22,135 units. For the first five months of 2025, Model Y sales declined 23.59% to 162,781 units, while Model 3 sales dipped 8.76% to 130,094 units.
Tesla faces increasing pressure in China’s competitive EV market, where local rivals are accelerating launches and cutting prices to boost volumes and protect market share.