Tesla’s sales in China fell to their lowest level in three years in October, deepening concerns over the electric vehicle (EV) maker’s weakening grip on key global markets.
The latest figures highlight how Elon Musk’s company — once the undisputed leader in the global EV race — is losing momentum amid fierce competition, cooling demand, and growing unease over Musk’s political posturing.
Data from the China Passenger Car Association (CPCA) showed that Tesla sold 26,006 vehicles in China last month — a staggering 35.8% decline from a year earlier and a sharp fall from 71,525 in September, when it began delivering the new long-wheelbase Model Y L SUV. It was Tesla’s weakest monthly sales performance in China since 2020.
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While exports of China-made Teslas rose to a two-year high of 35,491 units, the automaker’s share of China’s EV market collapsed to 3.2% in October, down from 8.7% a month earlier — its lowest in more than three years. The drop underscores Tesla’s deepening vulnerability in a market now dominated by well-funded Chinese rivals, including BYD, Li Auto, and Xiaomi, whose EV arm reported record sales of 48,654 units last month.
Tesla’s poor showing in China follows disappointing results in Europe, where sales have slumped in major markets such as Germany, Spain, the Netherlands, and across the Nordic countries. Analysts have pointed to a combination of intensifying competition and Musk’s increasingly right-wing political rhetoric, which they say has alienated many environmentally conscious consumers — the very demographic that fueled Tesla’s rise.
In the United States, Tesla has also faced headwinds. EV adoption growth has slowed, while Ford, General Motors, Rivian, and Hyundai have all launched aggressively priced alternatives that have impacted Tesla’s dominance. According to analysts, Musk’s high-profile political commentary — including his alignment with conservative figures and criticism of diversity initiatives — has become a reputational drag on Tesla’s brand appeal, particularly among progressive consumers in North America and Europe.
Yet Musk has signaled that he is betting on the next frontier of AI and robotics to drive Tesla’s comeback. The company is doubling down on autonomous driving technologies and AI-powered products, including plans to launch a dedicated robotaxi fleet and expand production of the Optimus humanoid robot — a project Musk claims could eventually be “worth more than Tesla’s car business.”
These initiatives are central to Musk’s broader vision to transform Tesla into an AI-driven robotics company, a pivot that underpinned his $1 trillion pay package, recently approved by Tesla shareholders after months of controversy. Musk has argued that the compensation plan aligns his incentives with Tesla’s long-term value creation, saying the company’s future lies “beyond cars.”
However, skeptics remain cautious. Analysts note that robotaxis and humanoid robots are still in early experimental stages, with regulatory, safety, and technological hurdles likely to delay commercialization for years. Meanwhile, Tesla’s profit margins continue to shrink under the weight of price cuts aimed at maintaining sales volume in a crowded market.
China — Tesla’s second-largest market after the United States — remains a critical battleground for Musk’s turnaround ambitions. But with BYD and Xiaomi rapidly expanding and domestic consumer confidence softening due to weaker government subsidies, Tesla’s once-dominant position looks increasingly fragile.
The company’s future currently hinges on whether Musk’s ambitious AI push can offset the erosion of its EV leadership — and whether his political choices will continue to overshadow the brand’s technological promise.