Tesla China sales jump 22.5% in May as EV market rebounds

Tesla's China retail sales surged 22.5% year-on-year in May to 47,281 units, ending a two-month decline as the world's largest electric vehicle market showed signs of recovery.

Tesla's China retail sales surged 22.5% year-on-year in May to 47,281 units, ending a two-month decline and pointing to a recovery in the world's largest electric vehicle market.

"These figures indicate an initial recovery in China's EV market," the China Passenger Car Association said in its monthly report, as total new energy vehicle retail sales reached 950,000 units in May, up 18.6% from a year earlier.

Tesla's domestic deliveries jumped 82.2% from April, when sales hit a trough. The Shanghai factory exported 38,701 vehicles in May, up 67.7% year-on-year, bringing total wholesale volume — domestic sales plus exports — to 85,982 units, a 39.4% increase from a year earlier. The Model Y accounted for 54,765 of those units, while the Model 3 contributed 31,217.

The rebound comes as Tesla pushes ahead with plans to roll out its Full Self-Driving technology in China, a move that could further boost demand. But the company faces headwinds: a group of 10 Chinese car owners recently sued Tesla for allegedly claiming FSD features were available without regulatory approval.

BYD Flat, Leapmotor and Zeekr Surge 80%

BYD halted an eight-month streak of declining sales volumes in May, delivering 376,990 new energy vehicles — essentially flat from a year earlier. Leapmotor and Zeekr both posted sales growth of more than 80%, while Nio saw a 62.3% year-on-year increase after releasing its first flagship EV in over two years. Xiaomi reported more than 30,000 deliveries, up 7.1% year-on-year, and set a lap record at the Nürburgring with its new YU7 GT SUV.

Not all automakers shared in the recovery. Li Auto's sales fell 18.4% year-on-year, while XPeng dropped 4.1%.

Market Share Recovery

Tesla's share of China's NEV retail market climbed to 4.98% in May, up from 3.78% a year earlier and well above April's 3.06% trough. In the battery electric vehicle segment alone, Tesla's share reached 7.42%, recovering from 4.48% in April.

The broader market remains under pressure. China's total passenger vehicle retail sales fell 22.1% year-on-year in May to 1.51 million units, as conventional fuel vehicle sales plunged 39%. NEV exports surged 112.6% year-on-year to 424,000 units, highlighting the growing importance of overseas markets for Chinese EV makers.

Tesla shares trade at elevated multiples relative to Chinese peers, reflecting the premium investors place on its autonomous driving ambitions. The FSD rollout in China, if approved, could open a new revenue stream in a market where local competitors like BYD and XPeng are racing to deploy their own driver-assistance systems. Goldman Sachs recently cut its price target on Li Auto to 70 Hong Kong dollars, while Morgan Stanley reiterated its overweight rating on XPeng with a target of 96 Hong Kong dollars, reflecting divergent views on which Chinese EV makers will weather the price war.

This article is for informational purposes only and does not constitute investment advice.