Tesla Sales of China-Made EVs Fall in July to Intense Cost Competition
By Reuters | 04 Aug, 2025

The surge of EVs from Chinese companies is forcing Tesla to work on bigger low-cost models with longer range.

Tesla cars charge at a Supercharger charging station of the electric vehicle (EV) maker in Beijing, China March 24, 2025. REUTERS/Florence Lo/File Photo

Tesla's sales of China-made electric vehicles fell 8.4% in July from a year earlier, reversing a small increase in June, amid rising competition from rivals offering lower-priced new models. 

Deliveries of Tesla's China-made Model 3 and Model Y vehicles, including exports to Europe and other markets, reached 67,886 cars last month, down 5.2% from June, data from the China Passenger Car Association showed on Monday.

Top Chinese rival BYD, with its Ocean and Dynasty lineups of EVs and plug-in hybrids, delivered almost flat global passenger car sales at 341,300 vehicles in July.

Tesla's July reading followed a 0.8% rise year-on-year in sales of its China-made EVs in June, which ended an eight-month losing streak, but fell short of stopping quarterly declines.

Elon Musk's EV company, grappling with weak demand and a backlash among some consumers against his political views, posted its biggest quarterly sales decline globally in over a decade in the second quarter.

Aiming for growth from robotaxis and humanoid robots, the company is also working on a new, cheaper car, but sources have told Reuters the vehicle, a stripped-down version of its best-selling Model Y, would be delayed by at least several months.

The Chinese auto market, the world's largest, is in the midst of a price war that has bruised automakers, suppliers and dealerships and prompted authorities to call for a truce.

Tesla is preparing to launch a six-seat, longer-wheelbase version of its Model Y in China. A longer-range, rear-wheel drive Model 3 is also coming to the Chinese market.

(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh. Editing by David Goodman and Mark Potter)