Why Tesla (TSLA) Remains Resilient Despite China’s EV Sales Slump

Key Takeaways

• February saw Chinese EV deliveries plummet, with BYD declining 41% and XPeng tumbling 50% compared to last year.
• The combined sales figures for NIO, Li Auto, and XPeng hit their lowest point since January 2023.
• Tesla’s China sales reached approximately 631,000 vehicles in 2025, marking a 4% decrease and the company’s first yearly decline in the region.
• Despite weakening EV deliveries, Tesla stock has climbed 37% over the past year, fueled by artificial intelligence enthusiasm.
• An NHTSA compliance deadline requires Tesla to provide robotaxi crash information by March 9.

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The Chinese electric vehicle market stumbled significantly in early 2026, with February figures painting a challenging picture across the entire industry.

Tesla, Inc., TSLA

BYD’s February passenger vehicle deliveries totaled 187,782 units, representing a substantial 41% year-over-year decline. The company’s fully electric vehicle segment dropped 36%, delivering 79,539 units.

XPeng experienced an even sharper downturn with 15,256 deliveries, plunging 50% compared to February 2025. Li Auto fared slightly better with 26,421 units, down 5%. NIO stood out as the lone performer showing growth, delivering 20,797 vehicles — a robust 57% year-over-year increase.

When combined, the trio of NIO, Li Auto, and XPeng delivered 62,474 units, representing a 10.6% decline from the previous year. This figure represents their poorest collective monthly showing since early 2023.

For BYD, February’s results marked the most severe year-over-year delivery contraction in the company’s tracking history dating back to 2021.

Tesla’s exposure to the Chinese market remains significant. The region contributed 22% of Tesla’s total revenue in 2025. The automaker delivered approximately 631,000 vehicles in China last year — a roughly 4% decline from 2024, marking its inaugural annual sales drop in the world’s largest EV market.

On a worldwide basis, Tesla delivered roughly 1.6 million vehicles throughout 2025, down nearly 9% from the previous year. This represents back-to-back annual delivery decreases for the electric vehicle pioneer.

Artificial Intelligence Powers Stock Performance, Not Vehicle Sales

Despite declining delivery numbers, Tesla stock began Monday trading up approximately 37% compared to twelve months earlier. The market is primarily valuing Tesla’s artificial intelligence aspirations over its automotive operations.

Tesla initiated an autonomous robotaxi service without human supervision in Austin, Texas during June 2025. Expansion plans include additional cities during 2026’s first half, and the company expects to reveal its third-generation Optimus humanoid robot in the coming months.

These AI achievements currently carry more weight with investors than traditional delivery metrics. However, EV sales remain crucial — they provide the primary cash flow that finances Tesla’s AI development initiatives.

Upcoming Regulatory Compliance: March 9

Investors are monitoring another critical date approaching on the calendar: March 9.

Tesla must provide crash data concerning possible FSD traffic regulation violations to the NHTSA by that deadline. This submission forms part of an ongoing federal safety investigation.

Since launching its Austin robotaxi service in June 2025, Tesla has documented 14 incidents. When the NHTSA initiated its investigation, regulators identified 58 incidents, with Tesla reportedly examining over 8,300 records.

Among the 14 documented collisions, numerous incidents happened at extremely low speeds or while stationary. Multiple reports indicate the robotaxi had already stopped prior to contact. These incident reports don’t determine liability.

Tesla’s publicly released safety statistics indicate supervised FSD experiences a significant crash approximately every 5.3 million miles, contrasting sharply with the U.S. driver average of one crash per 660,000 miles.

Meanwhile, Tesla’s Chinese competitors are experiencing their own market challenges. NIO stock has gained 5% over the trailing twelve months. Li Auto has declined 43%, XPeng dropped 18%, and BYD fell 23%.

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