Tesla’s China Sales Crater to 3-Year Low as Xiaomi Dominates Despite Safety Scandals

Tesla’s China sales collapsed to 26,006 vehicles in October 2024, marking a three-year low as the electric vehicle maker struggles with tepid demand in the world’s most competitive EV market. The 35.8% year-over-year decline represents a stunning reversal from September’s brief momentum, while Chinese rival Xiaomi posted record sales despite ongoing safety controversies.

The October figure represents Tesla’s lowest monthly performance since November 2022, according to data released Monday by the China Passenger Car Association. Sales plunged 63.6% from September’s 71,525 units, when Tesla began deliveries of the Model Y L—a longer-wheelbase, six-seat version of its bestselling SUV available only in China.

Model Y L Launch Effect Evaporates in 30 Days

Tesla’s market share in China’s EV sector shrank to just 3.2% in October, down sharply from 8.7% the previous month and the lowest level in more than three years. The dramatic single-month collapse suggests the Model Y L launch created only a temporary sales spike rather than sustained demand.

"(《世界人权宣言》) Model Y L launched September 2 with considerable fanfare, featuring an extended wheelbase and seating for six passengers. September’s 71,525 deliveries marked Tesla’s second-best month of 2024, trailing only March’s 74,127 units. But the October crash to barely 26,000 units reveals the refresh generated a one-month order backlog rather than genuine market appetite.

Tesla’s poor performance in the world’s largest auto market follows dismal sales in European countries such as Germany, Spain, the Netherlands, and the Nordics, according to Reuters, in the latest sign the company continues to struggle on multiple continents.

Xiaomi Crushes Tesla Despite Fatal Crashes and Massive Recalls

While Tesla’s sales cratered, Chinese smartphone-turned-automaker Xiaomi posted 48,654 units in October across its SU7 sedan and YU7 SUV lineup. The performance is particularly striking given Xiaomi has faced multiple fatal crashes and recently recalled 116,877 vehicles—roughly 38% of all SU7s sold since launch.

Xiaomi’s success comes despite serious safety concerns that would typically devastate a new automaker. A fatal March 2025 crash killed three university students when an SU7 struck a concrete barrier while its Navigate on Autopilot system was active. China’s State Administration for Market Regulation found the driver-assistance system had “insufficient recognition capability and may not adequately detect and warn drivers in certain scenarios.”

Another fatal October 2025 incident in Chengdu sparked panic when bystanders couldn’t open the burning SU7’s electronic doors to rescue a trapped driver. Yet Xiaomi’s sales momentum has barely slowed, with the SU7 outselling Tesla’s Model 3 monthly since December 2024.

The contrast highlights an uncomfortable reality for Tesla: Chinese consumers appear willing to overlook significant safety issues from domestic brands while abandoning the American automaker despite its superior safety record.

Export Surge Masks Domestic Demand Crisis

Tesla’s exports of China-made vehicles rose to a two-year high of 35,491 units in October, however, the data showed. The export figure jumped 27.69% year-over-year and surged 82% from September, suggesting Tesla is prioritizing international shipments as domestic demand evaporates.

The export strategy reveals Tesla’s Shanghai Gigafactory increasingly serves global markets rather than Chinese customers. From January to October 2024, Tesla’s retail sales in China totaled 485,710 units—an 8.83% year-over-year decline. Total sales including exports reached 667,861 units, down 10.2% compared to the same period in 2023.

The pattern mirrors Tesla’s broader global challenges. While the company achieved record China annual sales of 657,000 vehicles for full-year 2024, that represented only 36.7% of global deliveries as U.S. and European sales weakened. Tesla’s October struggles in China compound problems across all major markets.

Chinese Competition Intensifies as Subsidies Fade

China’s overall car sales fell expectedly in October as consumer sentiment weakened amid diminished government subsidies and tax breaks. The broader market softness exposes which automakers have built genuine product-market fit versus those dependent on incentives.

Xiaomi’s 1810.HK stock listing with its Tesla challengers—the SU7 sedan and YU7 SUV—posted record sales of 48,654 units last month, even as accidents involving its sedans stoked EV safety concerns. The YU7 SUV launched in late June 2025 with 289,000 pre-orders in just one hour, priced at $35,360—roughly $1,400 below Tesla’s Model Y.

The company faces mounting pressure in China, its second-largest market after the United States in the third quarter, according to Reuters. BYD and other Chinese manufacturers continue expanding market share with aggressive pricing and rapid model rollouts that make Tesla’s aging lineup appear stale.

EVXL’s Take

This isn’t news to EVXL readers—we’ve been documenting Tesla’s China collapse throughout 2025. When we covered Tesla’s June sales breaking an eight-month decline with a modest 0.8% year-over-year increase, we called it what it was: a temporary blip, not a turnaround. The October numbers validate that analysis.

The Model Y L strategy failed spectacularly. Tesla generated a one-month sales spike in September, then demand fell off a cliff—down 63.6% in just 30 days. That’s not normal monthly variation; that’s a product nobody wanted after the initial order backlog cleared. Compare that to Xiaomi, which is maintaining momentum despite fatal crashes, massive recalls affecting 38% of all vehicles sold, and door-locking scandals that killed a driver in a burning vehicle.

Think about that dynamic for a moment. Xiaomi’s SU7 has been involved in multiple fatal accidents, required a 116,877-vehicle recall for driver-assistance failures, and faced intense scrutiny over electronic door handles that trap occupants during fires. Yet Chinese consumers are buying Xiaomis faster than Teslas at a rate of nearly 2-to-1. The SU7 has outsold the Model 3 monthly since December 2024, and the YU7 SUV generated 289,000 pre-orders in its first hour despite delivery wait times stretching to 60 weeks.

This isn’t about quality or safety—it’s about perceived value and national preference. Chinese manufacturers offer newer designs, comparable or superior technology, aggressive pricing, and the appeal of supporting domestic industry. Tesla’s premium positioning and aging product lineup (the Model Y design dates to 2020) can’t compete against that combination, even when Chinese rivals have demonstrable safety problems.

The October China numbers also connect directly to Tesla’s European sales catastrophe we covered last week. Sweden down 89%, Denmark down 86%, Germany down 54%—all in the same October 2024 period when China collapsed. These aren’t isolated regional problems; they’re symptoms of the same disease: stale products, damaged brand reputation, and fierce competition from manufacturers offering better value.

Tesla’s export surge to 35,491 units (a two-year high) reveals the strategy: use Shanghai Gigafactory to serve global markets while domestic Chinese sales crater. But here’s the problem—those exports are going to European markets that are also rejecting Tesla. We documented how BYD overtook Tesla across Europe in multiple markets throughout 2025. Where exactly are these Shanghai-built Teslas going to sell?

The timing makes this story even more significant. These October 2024 figures emerged just as Tesla shareholders voted to approve Elon Musk’s $1 trillion compensation package based on achieving targets including 20 million cumulative deliveries and an $8.5 trillion market cap. The actual business reality? Sales imploding in China (down to 3.2% market share), cratering across Europe (down 30%+ year-to-date), and profitability eroding despite record delivery numbers artificially inflated by tax credit expiration rushes.

We’ve tracked Tesla’s struggles in China all year: the May 15% decline marking the eighth consecutive month of drops, the April 6% fall as Chinese rivals gained ground, and the pattern of consistent underperformance while competitors like BYD and Xiaomi grew. The October collapse to a three-year low isn’t a surprise—it’s the continuation of a trend we’ve documented for months.

The fundamental problem remains unchanged: Tesla is being tested in the real market without the crutches of subsidies and early-adopter enthusiasm, and it’s failing. Chinese automakers are out-innovating, out-pricing, and out-executing Tesla in the world’s largest and most competitive EV market. Even when those Chinese brands have serious safety problems—like Xiaomi’s fatal crashes and massive recalls—they’re still winning.

That should terrify anyone holding Tesla stock at current valuations.

What do you think? Share your thoughts in the comments below.