Tesla’s China EV Sales See 3.7% Y/Y Increase

Tesla just gave us another reason to watch the EV race in China closely. In June 2025, Tesla sold over 61,000 vehicles in the country. That marks a 3.7% increase from the same month a year ago. Even more impressive? Sales jumped 59% from May.

This growth may not sound huge, but in a market as crowded and competitive as China’s, it speaks volumes. Local brands like BYD and XPeng are pushing hard. Still, Tesla is holding its ground. And we think that’s worth digging into.

We’ll take a closer look at what these numbers truly reveal. We’ll break down the reasons for this growth, the roadblocks Tesla faces, and what this all means for the future of EVs, not just in China, but around the world.

Tesla’s Performance Snapshot

In June, Tesla moved 61,000 units, a solid 3.7% more than June 2024. That’s a 59% increase over May’s figures. Another report says Tesla’s China-made EVs—including exports—hit 71,599 units, ending an 8-month decline with a slim 0.8% Y/Y gain. But on a quarterly scale, things aren’t as rosy: Q2 China-made deliveries dropped 6.8% Y/Y, and global deliveries were down 13.5% So while June shines, Tesla still faces rough seas ahead.

Factors Behind the Growth

Several things worked in Tesla’s favor:

1. Factory efficiency – Giga Shanghai is producing for both China and overseas markets. In June, output rose by 16.1% from May.
2. New Model Y update – Tesla recently upgraded Model Y, giving buyers more range and features, partly driving the boost.
3. Strategic pricing – Tesla raised the long-range Model 3 price by 3.6%, but also extended its range by 40 km. This gives a value edge compared to competitors.
4. EV-friendly policies – China’s push for NEVs continues. In May, EVs made up about 53% of total auto sales, with BEVs alone at roughly 31%.

Together, these made June a standout month for Tesla.

Challenges Tesla Faces in China

Tesla can’t rest easy. Here’s why:

• Homegrown competitors such as BYD, XPeng, NIO, and Xiaomi are rapidly gaining ground. In June, BYD delivered 377,628 electric vehicles, marking an 11% year-over-year increase, while Xiaomi’s YU7 SUV received around 300,000 orders within an hour.
• Price cuts from rivals – BYD slashed prices up to 34%, forcing Tesla to respond.
• Product lineup issues – Tesla’s Model 3 and Y are aging. Xiaomi’s YU7 surpassed the Model 3 on monthly sales in H2 2024.
• Price war fatigue – Since late 2022, Chinese automakers have cut prices aggressively. This battle squeezes margins across the board.
• Reputation drag – Some buyers reacted negatively to Elon Musk’s public and political stances.

Market Comparison and Industry Trends

Tesla is doing okay. But China’s EV market is booming:

• BEVs had around 3a 1% share of auto sales in May, and NEVs overall made up about 53%.
• BYD alone holds nearly a 29% share of China’s new energy market.
• June deliveries: BYD – 377,628; XPeng – 34,611; NIO – 24,925; Li Auto – 36,279. Combined, these Chinese brands sold 95,800 EVs, surpassing Tesla’s output.
• New models – Xiaomi’s YU7 and SU7, Xiaomi’s smart brand approach, are giving Tesla serious competition.

China’s EV game is extreme, fast, and SUVs sell high-tech features at lower prices.

Impact on Tesla’s Global Strategy

Why does China matter? Because:

• In Q2, nearly half of Tesla’s global production—about 49.9%—came from its China-based factories.
• Tesla shipped these cars not just in China but to Europe and Asia too. Ihanghai is a key export hub. 
• Q2 global deliveries hit 384,122 units, below forecasts of 389,000. June’s boost helped contain the drop. Tesla stock jumped ~5% on better-than-feared results.
• Still, global EV deliveries are projected to fall 10% this year.

So, win or lose in China, it echoes globally.

What’s Next?

Looking ahead:

• Tesla is pushing forward with Giga Shanghai. New upgrades, possibly even an entry model, may come soon.
• Competitors launching rapidly, BYD and Xiaomi are rolling out new models monthly. Tesla might respond by updating its models or adding new features.
•  Price strategy, Tesla might cut prices or offer incentives. However, previous major price drops have reduced profit margins.

• EV policies: China’s subsidies and tax breaks for NEVs are set to continue through 2027. That supports demand, but also fuels fierce pricing battles.
• If Tesla keeps making gains, it will prevent a deeper slide in Q3 and could boost confidence for Q4.

Conclusion

Tesla’s 3.7% Y/Y rise in June shines in a vast, tough market. Yet its place here is fragile. Local rivals are snapping at its heels. June’s boost gives a glimmer of hope—but Tesla must keep up with fresh models, smart pricing, and tech upgrades. Because in China, staying ahead means always evolving.

FAQS:

Disclaimer:

This content is for informational purposes only and not financial advice. Always conduct your research.