Tesla Q2 Sales Fall 12% China Amid Rising Local EV Competition

Tesla's electric vehicle sales in China have declined by 11.7% year-over-year in Q2 2025, ending three consecutive quarters of growth, with exports showing mixed results as June exports dropped sharply despite quarterly gains. This sales downturn contrasts with the robust growth of Chinese EV manufacturers like BYD, which sold over 206,000 fully electric vehicles in June, surpassing Tesla’s global deliveries in the first half of the year, driven by a diverse and affordable model lineup. Tesla's market share in China is shrinking as local competitors offer vehicles better tailored to Chinese consumer preferences, featuring advanced technologies not found in Tesla models, while Musk's strained political ties have further complicated Tesla's standing in the region. Reflecting these challenges, Tesla's stock price has fallen significantly, experiencing its largest declines since June 2025 and becoming the worst performer in major U.S. indices recently. Overall, Tesla faces increasing competition in its key Chinese market, with domestic rivals capitalizing on local demand and innovation to erode Tesla’s dominance.