Tesla’s China-made electric vehicle sales fell 9.9% year-over-year in October 2025 to 61,497 units, reversing a brief September uptick and signaling renewed struggles in the world’s largest EV market. The decline, reported by the China Passenger Car Association, marks a troubling return to the downward trajectory that plagued the automaker for eight consecutive months earlier this year.

The October figures represent a sharp 32.3% drop from September’s 2.8% year-over-year increase, which had temporarily broken Tesla’s losing streak. Sales of Model 3 and Model Y vehicles from Tesla’s Shanghai gigafactory—including both domestic deliveries and exports to Europe, India, and other markets—continue to face mounting pressure from Chinese competitors offering comparable technology at significantly lower prices.

BYD Faces Its Own Challenges

Tesla isn’t alone in struggling through China’s automotive bloodbath. Chinese EV giant BYD, Tesla’s most formidable global competitor, posted a 12% drop in global vehicle sales to 441,706 units in October, down from 502,675 units a year earlier. This marks BYD’s second consecutive month of year-over-year decline and represents the steepest fall in nearly two years amid what industry observers describe as hyper-competition in the home market.

BYD’s plug-in hybrid sales plunged 31% year-over-year, though battery electric vehicle sales rose 17% to 222,559 units. The Shenzhen-based manufacturer reported a 33% drop in third-quarter profit last week, with revenue declining 3% for the quarter—the first such drop in more than five years.

Price War Pressures Mount

The simultaneous struggles of both Tesla and BYD underscore the intensity of China’s ongoing EV price war, which has drawn more than 40 brands into aggressive discounting. Chinese regulators warned manufacturers in June about “rat-race competition” and urged self-regulation after BYD slashed prices by up to 34% on select models in May.

Tesla has not yet announced the availability on the Chinese market of lower-cost versions of its best-selling Model Y SUVs and Model 3 sedans, which were unveiled last month. In spite of the swift European roll-out of the new cars, which opt out of some premium features, Tesla sales resumed falling in a number of countries there, pointing to continued struggles on a continent that has been crowded with budget EVs.

By comparison, BYD has seen robust sales growth in Europe even while its growth on home turf hit a speed bump.

Cybercab Showcase and Robotaxi Competition

Tesla is also set to showcase its Cybercab in Shanghai from Wednesday. It remains unknown if Tesla has planned the robotaxi’s roll-out on Chinese roads where local firms such as Baidu, Pony.ai, and WeRide have been testing their robotaxis in various cities.

The Cybercab debut at the China International Import Expo (November 5-10) marks the autonomous vehicle’s first appearance in Asia-Pacific, though Tesla faces significant regulatory hurdles and established competition from Chinese companies that have been conducting robotaxi trials for years.

EVXL’s Take

Tesla’s October numbers tell a story we’ve been tracking all year—and it’s getting worse, not better. When we covered Tesla’s June sales breaking an eight-month decline, that 0.8% year-over-year increase looked like a potential turning point. Three months later, it’s clear that was just a blip in a much longer downward trend.

What makes October’s 9.9% decline particularly significant is the context: even BYD, which has been eating Tesla’s lunch in China for months, is now struggling with a 12% drop. This isn’t about Tesla losing to Chinese competitors anymore—it’s about an entire industry drowning in overcapacity and suicidal pricing strategies. When we reported on BYD slashing prices up to 34% in May, we warned this price war was unsustainable. Now both companies are paying the price.

The real missed opportunity here is Tesla’s delay in launching those lower-cost Model Y and Model 3 versions in China. We covered plans for mass production of a cheaper Model Y in Shanghai starting in 2026—but 2026 might as well be a decade away in a market moving this fast. BYD’s sub-$10,000 Seagull and $21,000 Song Plus are capturing buyers right now, not next year.

The Cybercab showcase feels like a distraction from the core problem. While Tesla shows off futuristic robotaxis, Baidu, Pony.ai, and WeRide have been operating real robotaxi services on Chinese streets for years. As we noted when covering Chinese EV manufacturers’ explosive growth, domestic buyers increasingly favor local brands amid strained U.S.-China relations—and a flashy prototype isn’t going to change that calculus.

The pattern we’ve documented since September 2024 is clear: Tesla is slowly losing its foothold in the world’s largest EV market. Unless those budget models arrive soon—and can somehow compete with Chinese EVs that include advanced driver-assistance systems at no extra cost—we’re likely to see more months like October ahead.

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