TLDR
- Tesla’s China-made vehicle sales dropped 9.9% to 61,497 units in October 2025
- Shanghai factory output declined 32.3% from September across all markets
- Competitors NIO and XPeng achieved record monthly deliveries in October
- Tesla sold 438,000 China vehicles through September, down 5% from 2024
- China and U.S. EV tax incentives are being reduced or eliminated
Tesla’s China operations faced headwinds in October 2025. The electric vehicle maker sold 61,497 China-manufactured vehicles, representing a 9.9% decrease from October 2024.
The October figures marked a reversal from September’s 2.8% growth. China Passenger Car Association data showed the decline affected Tesla’s entire Shanghai manufacturing output.
Tesla’s Shanghai facility produces Model 3 and Model Y vehicles. The factory supplies both Chinese customers and exports to markets including Europe and India.
Total production from Shanghai dropped 32.3% compared to September levels. The monthly decrease suggests broader challenges for Tesla’s Chinese operations.
Chinese Automakers Post Strong October Results
Several Chinese EV manufacturers reported growth while Tesla declined. NIO set a company record with 40,397 deliveries in October, jumping 93% year-over-year.
XPeng also reached record territory with 42,013 vehicle deliveries. The company’s October sales climbed 76% compared to the same month in 2024.
Li Auto delivered 31,767 vehicles, though this represented a 38% year-over-year decrease. BYD sold 222,559 pure electric vehicles, up 17% from October 2024.
BYD’s overall numbers paint a more complex picture. Total deliveries including plug-in hybrids fell 11% as Chinese domestic sales dropped 24%.
The company exported 83,542 vehicles in October, surging 188% from last year. Export growth partially offset weaker home market performance.
Tesla’s China Market Position
China represents a major revenue source for Tesla. The market contributed more than 20% of the company’s 2024 total revenue.
Through the first nine months of 2025, Tesla sold roughly 438,000 vehicles in China. Sales declined 5% compared to the January-September 2024 period.
Tesla appears on track for its first annual China sales decrease. The Chinese market represented approximately 36% of Tesla’s global vehicle deliveries through three quarters of 2025.
That percentage matches Tesla’s China dependence from the same 2024 period. Recovering lost ground in the fourth quarter faces obstacles from intensifying competition.
Policy Changes Create Market Uncertainty
Government incentive programs are shifting in key markets. China plans to reduce its New Energy Vehicle purchase tax exemption by half beginning in 2026.
Analysts expect the policy change could pressure first-half 2026 sales. The adjustment follows the U.S. federal government’s September 2025 elimination of the $7,500 EV tax credit.
American consumers rushed purchases before the credit expired. Electric vehicles captured a record 12% of U.S. new car sales in September.
Tesla delivered 497,099 vehicles globally in the third quarter, up 7% from 2024. U.S. sales reached 179,525 units, increasing 8% year-over-year.
The simultaneous reduction of purchase incentives in both markets adds complexity to Tesla’s outlook. Chinese competitors continue gaining strength as policy support diminishes across major markets.
Tesla’s Shanghai factory sold 61,497 vehicles in October 2025, down 9.9% year-over-year, while production fell 32.3% from the prior month.
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