Tesla (TSLA) Stock: China Sales Drop 9.9% in October as Competition Heats Up

TLDR

• Tesla’s China-made EV sales fell 9.9% year-over-year to 61,497 units in October 2025
• Shanghai factory output dropped 32.3% from September including exports to Europe and India
• Chinese rivals NIO and XPeng posted record October deliveries up 93% and 76% respectively
• Tesla sold 438,000 vehicles in China through September, down 5% from last year
• Chinese EV purchase tax exemption will be halved in 2026 following U.S. federal credit elimination

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Tesla’s China business hit a speed bump in October. The company sold 61,497 China-made electric vehicles during the month, down 9.9% from October 2024.

The decline reversed a 2.8% increase Tesla posted in September. Data from the China Passenger Car Association showed the weakness extended across Tesla’s Shanghai operations.

The Shanghai gigafactory produces Model 3 and Model Y vehicles for both domestic sales and exports. Output from the facility dropped 32.3% compared to September.

Tesla, Inc., TSLA

Those exports go to markets including Europe and India. The month-over-month decline suggests challenges beyond just the Chinese domestic market.

Chinese Rivals Post Record Numbers

While Tesla struggled, some competitors thrived. NIO delivered a record 40,397 vehicles in October, up 93% from the same month in 2024.

XPeng also hit a record with 42,013 deliveries, jumping 76% year-over-year. Li Auto delivered 31,767 vehicles, though that represented a 38% decline.

BYD sold 222,559 all-electric cars in October, up 17% from last year. However, the company’s total vehicle deliveries including plug-in hybrids fell 11%.

BYD exported 83,542 vehicles in October, up 188% from a year earlier. That meant domestic sales dropped 24% year-over-year to 358,164 vehicles.

The mixed results point to a shifting landscape. Growth is happening, but it’s not evenly distributed.

Tesla’s Year-to-Date China Performance

China represents a crucial market for Tesla. The country accounted for more than 20% of Tesla’s 2024 revenue.

Through September, Tesla sold about 438,000 vehicles in China. That’s down 5% from the same period in 2024.

The decline puts Tesla on track for its first annual sales decrease in the Chinese market. China represented about 36% of Tesla’s total vehicle sales in 2025 through three quarters.

That percentage mirrors the company’s reliance on the market in 2024. Making up the gap in the fourth quarter won’t be easy given current trends.

Subsidy Changes Create Headwinds

Policy shifts are adding pressure to the EV market. Chinese officials previously announced the New Energy Vehicle purchase tax exemption will be halved in 2026.

Citi analyst Jeff Chung expects the change could push down sales in the first half of next year. The timing follows similar moves in the United States.

The U.S. federal government eliminated the $7,500 EV purchase tax credit in September. Buyers rushed to beat the deadline, pushing EVs to a record 12% of new U.S. car sales that month.

Tesla benefited from the rush, selling a record 497,099 vehicles in the third quarter. U.S. sales reached 179,525 cars, up 8% year-over-year.

The question now is what happens when subsidies disappear. Both markets face that test in the coming months.

Tesla’s China sales fell 9.9% in October 2025 while competitors NIO and XPeng posted record deliveries.

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