Tesla China Sales Surge 10% in November as BYD Stumbles for Third Straight Month

Tesla’s Shanghai factory just posted its best month since September, and the timing couldn’t be more ironic. While Elon Musk builds his political empire in Washington alongside trade hawks pushing aggressive China tariffs, his Chinese factory is quietly propping up an otherwise bleeding company.

We’ve been tracking Tesla’s China collapse throughout 2025, from October’s three-year low to the global sales crisis that saw European registrations plunge 48.5%. November’s numbers tell a different story, at least on the surface.

Tesla shipped 86,700 vehicles from its Shanghai plant in November, up 10% from a year earlier, according to Bloomberg, citing preliminary data from China’s Passenger Car Association. This marks only the third time in 2025 that Tesla’s China shipments have increased year-over-year, and it’s the steepest annual gain in 14 months.

November 2025: Tesla vs. The Competition

The month-over-month jump is even more striking. Tesla’s November shipments surged 41% from October, when the company shipped just 61,497 vehicles and posted a 9.9% year-over-year decline. That October performance had us writing about Tesla’s renewed struggles in a market that has become increasingly hostile to the American automaker.

What’s Driving the Rebound?

Tesla introduced a longer-range rear-wheel-drive variant of the Model Y in China last month, following earlier launches of an updated long-range Model 3 and the six-seat Model Y L designed specifically for the Chinese market. These refreshed models appear to be generating demand that Tesla’s aging lineup couldn’t sustain.

But there’s a bigger factor at play: China’s EV tax exemption deadline.

Starting January 1, 2026, China’s NEV purchase tax exemption gets cut in half. Currently, qualifying EV buyers enjoy a tax waiver worth up to 30,000 yuan ($4,200). That drops to a maximum 15,000 yuan ($2,100) deduction next year. Chinese consumers are rushing to showrooms to lock in purchases before the December 31 deadline, and Tesla appears to be capturing some of that urgency.

BYD’s Stumble Opens the Door

Perhaps the most surprising element of November’s data is what happened to BYD. The world’s largest EV maker posted its third consecutive month of year-over-year declines, delivering 480,186 vehicles, down 5.3% from November 2024.

As we covered in our BYD analysis yesterday, the decline is particularly troubling because it comes during the traditional year-end buying surge. The tax deadline should be sparking a frenzy. Instead, BYD is watching monthly sales decline while Tesla rebounds.

BYD’s plug-in hybrid sales plummeted 22.4% year-over-year, marking the eighth consecutive month of PHEV decline. Chinese consumers are shifting toward fully electric vehicles, and BYD’s once-dominant hybrid lineup is losing relevance fast.

The Xiaomi Threat Isn’t Going Away

While Tesla and BYD battle for headlines, Xiaomi continues its meteoric rise. The smartphone-maker-turned-automaker delivered over 40,000 vehicles for the third consecutive month in November and recently celebrated its 500,000th vehicle rolling off the production line, just 19 months after starting customer deliveries.

Xiaomi has raised its 2025 delivery target twice this year, from 300,000 to 350,000 to now 400,000 vehicles. The YU7 SUV, launched in June, secured 240,000 non-refundable orders in just 18 hours and has been outselling Tesla’s Model Y in domestic Chinese deliveries.

A smartphone company is now beating Tesla in its own backyard. That reality should concern investors far more than one good month of shipment data.

The Bigger Picture: 2025 Is Still a Lost Year

November’s rebound doesn’t erase Tesla’s dismal 2025 performance. From January to November, Tesla China’s wholesale sales totaled 754,561 vehicles, down 8.3% year-over-year. Shipments have fallen in eight of eleven months this year.

The Shanghai factory, which can produce as many as 950,000 EVs annually and accounts for about 40% of Tesla’s total manufacturing capacity, has been operating well below potential. Even November’s strong showing of 86,700 units is far below the factory’s monthly capacity of roughly 79,000 vehicles.

EVXL’s Take

One good month does not make a turnaround. We’ve seen this movie before.

When we covered Tesla’s June sales breaking an eight-month decline with a modest 0.8% year-over-year increase, we called it a temporary blip, not a recovery. September’s Model Y L launch generated a one-month sales spike, then demand fell off a cliff with October’s 63.6% month-over-month collapse. Is November any different?

The structural problems remain unchanged. Tesla’s product lineup is aging while Chinese competitors iterate at smartphone-industry speed. Xiaomi went from zero to 500,000 vehicles in 19 months. BYD launches new models faster than Tesla updates software. Geely, Li Auto, and XPeng are all gaining ground with aggressive pricing and features Tesla can’t match.

Then there’s the political dimension. Musk has spent much of 2025 building influence in Washington, aligning with trade hawks who view China as an adversary. Yet his company remains utterly dependent on Shanghai. The factory isn’t just serving China. It functions as Tesla’s primary export hub, shipping vehicles to Europe, Australia, and other Asian markets. In October, the facility exported over 35,000 vehicles, the highest monthly export volume in two years.

The irony is almost too perfect. The same political forces Musk is cultivating could ultimately threaten the Chinese manufacturing base that’s keeping his company afloat. If the trade war escalates further, Tesla could find itself caught between two hostile superpowers with no good options.

For now, Tesla gets to celebrate a rare piece of good news from China. Enjoy it while it lasts. The 2026 subsidy cliff is coming, competition is intensifying, and one strong month won’t change the trajectory of a company that’s been losing ground in the world’s largest EV market for two years running.

What do you think about Tesla’s November rebound? Is this the start of a real recovery, or just another dead cat bounce? Share your thoughts in the comments below.