Tesla (TSLA) Stock: October China Sales Fall 10% as Rivals Gain Ground

TLDR

• Tesla China-made EV sales decreased 9.9% year-over-year to 61,497 units in October 2025
• Shanghai gigafactory production fell 32.3% from September including exports
• NIO and XPeng reported record October deliveries while Tesla sales declined
• Tesla through September sold 438,000 vehicles in China, down 5% year-over-year
• Purchase tax exemptions in China will be cut in half starting 2026

Tesla reported a 9.9% decline in China-made electric vehicle sales for October 2025. The company sold 61,497 units during the month compared to 68,280 in October 2024.

The drop reversed positive momentum from September when sales increased 2.8%. Data from the China Passenger Car Association revealed the weakness across Tesla’s Chinese operations.

Tesla’s Shanghai gigafactory manufactures Model 3 and Model Y vehicles for domestic customers and export markets. Production from the facility declined 32.3% compared to the previous month.

Tesla, Inc., TSLA

The factory ships vehicles to Europe, India and other international markets. The sharp monthly decline indicates challenges extending beyond Chinese consumer demand.

Competition Heats Up in Chinese EV Market

Tesla’s struggles came as several Chinese competitors posted strong numbers. NIO delivered 40,397 vehicles in October, up 93% from October 2024, marking a company record.

XPeng achieved record deliveries of 42,013 vehicles, rising 76% year-over-year. Li Auto delivered 31,767 vehicles, down 38% from the prior year.

BYD sold 222,559 all-electric vehicles in October, increasing 17% from last year. The company’s total deliveries including plug-in hybrids decreased 11% as domestic sales fell 24%.

BYD’s export volume jumped 188% to 83,542 vehicles. The export strength offset weakness in the Chinese domestic market.

Tesla’s Chinese Market Performance

China remains critical for Tesla’s global business. The market generated over 20% of Tesla’s total 2024 revenue.

Tesla sold approximately 438,000 vehicles in China through September 2025. Sales fell 5% compared to the same period in 2024.

The company appears headed toward its first annual sales decline in China. The Chinese market accounted for roughly 36% of Tesla’s worldwide vehicle sales through the first three quarters.

Tax Incentive Changes Approaching

Government policy changes are reshaping the EV landscape. China will cut its New Energy Vehicle purchase tax exemption by 50% starting in 2026.

Citi analyst Jeff Chung predicts the policy shift could reduce sales in early 2026. The change follows the U.S. elimination of federal EV tax credits in September 2025.

American buyers rushed to purchase before the credit expired. EVs reached a record 12% share of U.S. new car sales in September.

Tesla sold 497,099 vehicles globally in the third quarter, up 7% year-over-year. U.S. deliveries totaled 179,525 vehicles, increasing 8% from the prior year.

The expiration of purchase incentives in both major markets creates uncertainty for fourth quarter sales. Tesla faces a challenging environment as Chinese competitors gain market share and government support diminishes.

Tesla’s October China sales reached 61,497 units, down 9.9% from the previous year, while Shanghai factory output dropped 32.3% month-over-month.

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