Tesla stays competitive in China as January EV shipments tick higher

Tesla remained a visible player in China’s crowded electric vehicle market in January, even as industry momentum continued to fade.

Data from the China Passenger Car Association showed that deliveries from Tesla’s Shanghai Gigafactory rose modestly from a year earlier, helping the US automaker maintain its position among the country’s top EV producers.

The figures came as China’s EV sector faced slower growth, intense price competition, and new regulatory pressures.

January shipment trends

According to CPCA data released on Wednesday, Tesla delivered 69,129 China-made vehicles in January, up 9% from 63,238 units a year earlier.

The monthly total placed Tesla third among EV manufacturers operating in China.

BYD led January shipments with 205,518 units, while Geely ranked second with 124,252 vehicles.

Tesla’s year-on-year increase contrasted with the broader slowdown across the market and reflected stable factory output rather than a clear pickup in demand.

The January figures cover total shipments from Tesla’s Shanghai Gigafactory, which produces the Model 3 and Model Y for China and export markets across Europe and the Asia-Pacific region.

Demand signals remain mixed

Indicators of consumer demand remained uneven. New registrations of Tesla passenger vehicles, often used as a proxy for sales, rose slightly in Europe in January.

This suggested exports continued to absorb some of Shanghai’s output, even as demand conditions across key overseas markets stayed subdued.

A separate CPCA data showed Tesla was one of only two manufacturers in China to report a year-on-year decline in total EV sales during 2025, with China-produced deliveries falling 4.8% over the year.

The figures underscored the pressure Tesla faces in defending its position in the world’s largest EV market.

Price competition intensifies

China’s EV price war has weighed on manufacturers across the sector.

Tesla’s base Model 3 is priced at around 235,500 yuan ($33,943), compared with about 79,800 yuan for BYD’s entry-level Seal sedan.

To support demand, Tesla has introduced new financing incentives.

Its Chinese website shows the company offering five-year loans at zero interest, or seven-year loans at ultra-low interest rates, for orders placed before Feb. 28.

Experts have noted that sustained discounting has compressed margins across China’s EV industry, even as regulators urge manufacturers to avoid excessive price competition.

Slower growth and fresh rules

China’s wider EV market continued to cool in January.

CPCA data showed new energy vehicle sales, including battery and hybrid models, rose just 1% year on year, marking a fourth consecutive month of slowing growth.

Policy changes have added further strain. From Jan. 1, Beijing reinstated a 5% purchase tax on new energy vehicles, partially rolling back incentives that had supported sales for more than a decade.

Regulatory pressure is also building on vehicle design.

The Ministry of Industry and Information Technology said that from Jan. 1, 2027, all cars sold in China must include mechanical interior and exterior door releases, effectively banning concealed door handles.

Experts have said the rule may pose added challenges for Tesla, given its long-standing use of flush door handles.

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