Tesla’s retail sales in China plunged to their lowest level in three years in October. According to data released by the China Passenger Car Association (CPCA) on Monday, Tesla sold 26,006 vehicles in China last month — down 35.8% from the same period a year earlier and a steep 63.6% drop from September, when the company delivered over 71,000 units.
The decline marks Tesla’s weakest performance since November 2022.
Waning Model Y L Momentum and Export Surge
The drop comes just weeks after Tesla began delivering the Model Y L, a longer-wheelbase, six-seat version of its best-selling SUV designed exclusively for Chinese buyers. Initial enthusiasm around the launch lifted September’s results, but sales momentum quickly faded in October.
At the same time, Tesla redirected a significant share of production from Giga Shanghai toward export markets. The company shipped 35,491 vehicles overseas in October — the highest export total in nearly two years and an 84% increase from the previous month.
This surge helped offset some of the domestic weakness but contributed to the sharp drop in local deliveries.
Market Share Shrinks to Multi-Year Low
With the low sales, Tesla’s market share in China’s competitive EV sector fell to just 3.2% in October, down sharply from 8.7% in September and the lowest level in more than three years.
Intensifying competition from domestic brands likely played a key factor in Tesla’s decline in sales. Companies like Xiaomi, BYD, and Li Auto continue to release high-value models tailored to local consumers. Xiaomi, for example, achieved record monthly sales of 48,654 vehicles in October, despite recent safety concerns linked to its SU7 sedan.
New Variants Aim to Reignite Demand
Tesla appears to be taking steps to regain momentum. Over the weekend the company launched a new five-seat Model Y Long Range Rear-Wheel Drive in China, featuring an impressive 821 kilometre (CLTC) range — the longest in Tesla’s SUV lineup. Priced from RMB 288,500 (C$56,900/US$40,500), the new variant is expected to appeal to cost-conscious buyers seeking extended range.
Reports from Chinese media also suggest Tesla is developing simplified versions of the Model 3 and Model Y, codenamed “D50” and “E41,” that could begin production in mid-2026. These lower-cost variants are expected to target a broader customer base and compete more directly with China’s fast-growing domestic EV segment.
Year-to-Date Performance
From January through October, Tesla delivered 458,710 vehicles in China — down 8.4% year-over-year. Exports from the Shanghai facility totaled 209,151 units over the same period, representing a 14% decline. Overall wholesale sales from the plant reached 667,861 vehicles, a 10.2% decrease compared to last year, according to data tracked by CNEvPost.
With competition intensifying and consumer subsidies tapering off, Tesla’s next moves in China could prove pivotal to its global growth strategy.
