• Tesla’s China-made EV sales rose 0.8% year-over-year in June, ending an eight-month streak of declines.
  • Deliveries of Shanghai-made Model 3 and Model Y vehicles jumped 16% from May, including exports.
  • The slight rebound comes amid fierce competition from BYD, which saw June sales grow 11% to 377,628 units.

A Fragile Rebound for Tesla in China

Tesla’s China-made electric vehicle sales edged up 0.8% year-over-year in June to 71,599 units, snapping an eight-month losing streak, according to data from the China Passenger Car Association. The uptick was driven by a 16% month-over-month surge in deliveries of Shanghai-made Model 3 and Model Y vehicles, including both domestic sales and exports.

The modest recovery offers a glimmer of hope for Tesla, which has been grappling with intensifying competition from local rivals like BYD. The Chinese automaker reported an 11% year-over-year sales increase in June, delivering 377,628 vehicles—more than five times Tesla’s China figure.

Price Wars and Margin Pressures

Despite the June rebound, Tesla’s overall Q2 2025 deliveries in China fell 10.9% year-over-year, and analysts predict global sales for the year may drop by 6%. The company has relied heavily on price cuts and promotional incentives, such as interest-free loans, to attract buyers. These measures have squeezed gross margins in China, where the EV market is becoming increasingly saturated.

“The June sales increase is a positive signal, but it’s fragile,” said one analyst, who asked not to be named due to company policy. “Without substantial innovation or further product differentiation, Tesla will continue to face pressure from local competitors.”

Regulatory and Competitive Landscape

China’s EV market remains a battleground, with domestic automakers benefiting from government subsidies and favorable policies. Tesla, as one of the few wholly foreign-owned automakers with a major manufacturing presence in China, faces an unpredictable regulatory environment amid ongoing U.S.-China trade tensions.

Looking ahead, analysts caution that Tesla’s ability to sustain growth in China will depend on its response to pricing pressures and portfolio limitations. “The coming quarters will test whether new models and strategies can reclaim sustainable growth in the world’s largest EV market,” the analyst added.