China Turns Up Its Nose At The Tesla Model Y In Favor Of Homegrown EVs

Tesla has claimed the slow rollout of the Model Y SUV has been to blame for its sagging sales globally, but even now that the facelifted “Juniper” model is in full production, the automaker hasn’t seen much success in one of its largest markets. Despite greater demand for EVs, China hasn’t been buying too many Teslas in the past few weeks, with sales through the first five months of 2025 lagging behind the same period in 2024. Part of the problem for Tesla comes from the country’s significantly expanded lineup of home-grown EVs, many of which undercut Tesla in price and/or offer more range.

Tesla Is Falling Off A Cliff

In many parts of the world, the Tesla Model Y Juniper’s ramp-up has indeed yielded a rebound in sales for the EV manufacturer. But that’s not the case in China, where Tesla’s second-quarter sales are shaping up to be worse than Q1 2025. Electrek reports that Tesla sold only about 8,600 vehicles in the entire country in the first week of June, a drop of 4,000 units from the week before and far below projections. So far in 2025, Tesla sales are down by 20,000 compared to the same time period in 2024.

As in other parts of the world, the automaker has been incentivizing its vehicles in China, offering zero-interest loans and discounts to entice customers into showrooms. But in May, Tesla only produced 61,662 units in the country – 38,588 for Chinese consumption and a hair over 23,000 for export. Last May, Tesla sold more than 55,000 vehicles in China and exported nearly 20,000, meaning the company’s local output is down more than 10,000 units. Still more concerning is that the reduction hasn’t come as a result of a contracting local EV market; to the contrary, electric cars have surged in popularity 35 percent in Q1 2025, and Electrek reports the trend is continuing for Q2.

Related

Tesla Saw A Sales Decline For The First Time Ever In 2024

Facing slowing EV demand and a market rich in alternatives, Tesla moved 1.79 million units last year, a slight decline of 1.1 percent.

China’s Domestic EVs Are Doing Very Well

The biggest thorn in Tesla’s side could be BYD, which is expanding its lineup both at the top and the bottom of the EV market. According to Electrek, BYD triggered a price war by slashing the prices of some of its most popular EV models – the compact Seagull hatchback now costs just 55,800 yuan ($7,780), a surprising reduction considering it already started at less than $10,000. Per Electrek, the Chinese automaker feels comfortable sacrificing some profitability if it means its competitors won’t be able to match its low prices. That would present a major problem for Tesla, which doesn’t make much money in China on each EV sold.

Still, if a supermini hatchback doesn’t put much fear in Tesla’s heart, the new Xiaomi YU7 might. Spec chart warriors will note that even the shortest-range variant of the YU7, the performance-oriented Max trim, can travel 472 miles per charge, better than the longest-range Model Y’s 446 miles – both numbers using the generous China Light-Duty Test Cycle (CLTC). Other versions of the YU7 travel up to 519 miles, despite unconfirmed pricing that’s rumored to undercut the small Tesla crossover.

Source: Electrek