Tesla Inc recently reported a 13.5% year-over-year decline in second-quarter vehicle deliveries. The decline can be attributed to the Chinese market, where Tesla has struggled with demand.
Impact of the Chinese Market
Data from the China Passenger Car Association shows that Tesla deliveries in the second quarter were:
- Down 4.3% quarter-over-quarter
- Down 11.7% year-over-year
The company delivered 128,803 vehicles in China during the second quarter.
Model Y Refresh and Discounts
Despite the Model Y refresh and discounts, Tesla’s sales in China declined. The company had initially expected the refresh and discounts to boost demand in the second quarter. However, the sales decline occurred even with the Model Y refresh and all variants of the top-selling electric vehicle available.
Competition in the Chinese Market
China is one of the largest electric vehicle markets in the world and a major source of deliveries for Tesla. The company faces competition from other companies in the region, including Xpeng and Xiaomi, which offer EVs priced lower than the Model Y. The data suggests that competition, rather than boycotts and brand damage, may be hurting demand for Tesla vehicles in China.
Record Discounts
Tesla offered 0% financing on the Model 3 and Model Y in China during parts of the second quarter, marking record discounts. However, these discounts were not enough to boost sales in the region.
Stock Performance
Tesla stock closed up 1.32% on Tuesday to $297.81, with a 52-week trading range of $182 to $488.54. The stock is down 21.5% year-to-date in 2025.
Key Takeaways
- Tesla’s Q2 China rebound fell short of expectations
- The company’s sales in China declined despite the Model Y refresh and discounts
- Competition from Xpeng and Xiaomi may be hurting demand for Tesla vehicles in China
- Tesla’s stock performance has been affected by the sales decline and competition in the Chinese market.