Tesla’s China-Made EV Sales Drop 15% in May Amid Fierce Price Wars

Tesla‘s China-made electric vehicle (EV) sales fell 15% year-over-year in May 2025, marking the eighth consecutive month of decline, according to a recent Reuters report. The drop highlights the intense competition in China, the world’s largest auto market, where price wars and new competitors are challenging the U.S. automaker’s dominance.

Ongoing Decline in Tesla’s China Deliveries

Tesla delivered 61,662 China-made Model 3 en Model Y vehicles in May, a 15% decrease from the previous year, following a 6% drop in April. The China Passenger Car Association reported a 5.5% decline in deliveries from April to May. This downward trend reflects broader challenges for Tesla, including an aging model lineup and CEO Elon Musk‘s political activities, which have reportedly deterred some buyers.

Price Wars and Competition Heat Up

China’s EV market is facing brutal price competition, with Tesla under pressure from local giants like BYD, which saw a 14.1% year-over-year sales increase to 376,930 units in May. BYD recently slashed prices on over 20 models, prompting competitors Geely Auto and Chery to follow suit.

This price war, which began in 2023, has drawn over 40 brands into the fray. Tesla’s response includes offering smart assisted driving capability transfers for new vehicles in China through June 2025, alongside adding Model 3 and Model Y to a government-backed rural EV sales campaign.

Industry Trends and Future Outlook

The competitive landscape in China’s EV sector shows no signs of slowing. Lower-priced, high-performance models from rivals are gaining traction, pushing Tesla to innovate. While Tesla remains a key player globally, its struggles in China underscore the need for refreshed designs and strategic pricing. For EV enthusiasts, this price war could mean more affordable options, but it also signals a rapidly evolving market where innovation and adaptability are critical for survival.

Foto's met dank aan Tesla.