Tesla remained one of the leading foreign electric vehicle brands in China during January, as shipments from its Shanghai Gigafactory rose modestly despite a broader slowdown across the domestic EV market.
Data from the China Passenger Car Association showed Tesla delivered 69,129 China-made vehicles in January, representing a 9% increase from the same month last year, when 63,238 units were shipped.
That performance placed Tesla third among EV manufacturers for the month, trailing BYD with 205,518 vehicles and Geely, which recorded deliveries of 124,252 units.
However, industry analysts caution that higher shipments do not necessarily indicate strengthening consumer demand, particularly in the world’s largest electric vehicle market.
Tesla’s January figures reflect total shipments from its Shanghai facility, which supplies both domestic customers and overseas markets across Europe and the Asia-Pacific region.
Competitive Pressures And Price Sensitivity Intensify
Despite the year-on-year rise, Tesla remains under intense pressure from Chinese automakers offering significantly cheaper electric vehicles with increasingly competitive features.
According to CPCA data, Tesla was one of only two manufacturers in Beijing to report declining annual China-produced EV sales in 2025, with total volumes falling 4.8%.
Tesla’s base Model 3 is priced at roughly 235,500 yuan, almost three times the starting price of BYD’s Seal, which sells for around 79,800 yuan.
To remain competitive, Tesla has introduced aggressive financing incentives, including five-year zero-interest loans and seven-year ultra-low interest plans for qualifying orders.
“We have [had] really intense price wars that have gone on, although the government and industry have called on automakers to not engage with aggressive pricing strategies,” Abby Tu said.
Market Growth Slows As Policy Support Fades
China’s broader EV market has shown clear signs of cooling, with new energy vehicle sales rising just 1% year on year in January.
That marked the fourth consecutive month of slowing growth, highlighting growing concerns about saturation, pricing pressure, and weakening consumer confidence.
The outlook has been further complicated by the reinstatement of a 5% purchase tax on new energy vehicles beginning January 1.
The tax had previously been partially exempt for more than a decade, providing a significant tailwind for EV adoption across China.
Regulatory Shifts Add Design Challenges
Tesla’s position in China faces additional uncertainty following new safety regulations targeting concealed and flush-mounted door handles.
From January 1, 2027, all vehicles sold in China must feature interior and exterior mechanical door releases to ensure occupant safety during power failures.
The rule follows several high-profile accidents where EV occupants were unable to exit vehicles after fires disabled electronic locking systems.
Analysts suggest the regulation could present a “decent sized headache” for Tesla, given its reliance on flush handles as a core design feature.
However, many Chinese manufacturers are expected to adapt smoothly, having been consulted extensively during the drafting process.
