Tesla, which makes its Model 3 and Model Y vehicles in China, sold 93,926 Chinese-made vehicles worldwide in the first two months, down 28.7% year-on-year, according to data from the China Passenger Car Association (CPCA).
January-February sales were distorted by the Lunar New Year holiday shifting from February last year to late January this year and due to a partial suspension of Model Y production for upgrade work.
Still, Chinese rival BYD (002594.SZ), with its Dynasty and Ocean series of EVs and plug-in hybrids, recorded a 90.4% increase in passenger vehicle sales to 614,679 units last month.
BYD deepened a three-year-old price war in the world's largest auto market last month with the launch of smart EVs - EVs equipped with advanced driving-assistance systems - starting at below $10,000. That prompted peers including Leapmotor (9863.HK) and Geely (GEELY.UL) to follow suit with affordable smart EV rollouts.
Both Tesla models made in China are smart EVs. Tesla also exports its China-made EVs to markets including Europe, where sales plunged 45% in January.
To increase the appeal of its aging models, Tesla made a long-awaited update to its autopilot software in China to enable city navigation in late February. It also kicked off deliveries of the revamped Model Y in its second-largest market.
Model Y was the best-selling car in China itself in 2023 and 2024, although Chinese rivals have launched at least six models in the past year to take on Model Y. Tesla still benefits from a brand halo in China but analysts have said Xiaomi's (1810.HK) YU7 crossover to be launched later this year would be the strongest rival.
Sales of the Onvo L60, which Nio (9866.HK) launched in April to compete with Model Y and Toyota's (7203.T) RAV4, fell to 4,049 units in February. Nio Chief Executive William Li expects the model will reach monthly deliveries of 20,000 units in March, which he is counting on to improve Nio's profitability.
