Tesla’s China sales showed signs of stabilization in February after a weak start to the year, as the electric-vehicle maker navigates seasonal disruptions and intensifying competition in the world’s largest EV market. Tesla 
TSLA delivered 58,599 vehicles in China during the month, representing a 91% increase from a year earlier, according to data released Thursday by the China Passenger Car Association. The rebound follows a difficult January, when Tesla’s China retail volumes fell 45% to 18,485 units, marking the lowest level since late 2022 when China was beginning to recover from Covid lockdowns.
The recovery comes as Tesla continues to contend with strong competition from domestic automakers introducing new technologies and expanding their presence in the EV market. BYD (BYDDF) and Xiaomi (XIACY) are among the companies increasing pressure on foreign brands. BYD recently introduced a charging system it says can recharge a vehicle from 10% to 70% in about five minutes and reach near full charge in roughly nine minutes. Tesla has attempted to sustain buyer interest by extending financing programs offering zero or very low interest rates through the end of the first quarter.
At the same time, the broader Chinese auto market remains under pressure, which could continue to shape the near-term outlook for EV demand. Total vehicle sales in China declined 25% in February to around 1.03 million units, while new-energy vehicle sales, including EVs and plug-in hybrids, dropped 32% year over year, according to PCA data. The decline was partly attributed to a pull-forward effect after many buyers rushed to complete purchases in December before a new 5% tax on new-energy vehicles took effect at the start of the year. BYD, currently the world’s largest EV manufacturer, also reported a 41% year-over-year drop in February sales, and PCA Secretary General Cui Dongshu indicated the market slowdown could extend into March, with growth possibly returning in the second half of the year.
