Tesla’s domestic sales in China plummeted 45% in January, falling to 18,485 units – the lowest monthly figure since November 2022, according to data released by the China Passenger Car Association (CPCA).
The sharp decline, while occurring after a typical seasonal dip following a strong December, represents a significantly steeper drop than usual. In December 2022, Tesla delivered nearly 94,000 vehicles in China, boosted by customer demand ahead of the removal of subsidies for electric vehicle purchases. The January 2026 figure contrasts sharply with that peak.
While Tesla’s Shanghai factory produced 69,129 vehicles in January, a 9.3% year-over-year increase, the vast majority – 50,644 units – were destined for export markets. This represents a 71% surge in exports compared to the same period last year, and the second-highest export month on record for the facility, trailing only October 2022. The trend indicates a growing reliance on international markets for Tesla’s Shanghai production, with only 18,485 vehicles remaining for domestic Chinese consumers.
The shift in production focus comes as competition intensifies within China’s electric vehicle market. The popular Tesla Model Y has fallen to 20th place in domestic retail rankings, overtaken by vehicles like the Xiaomi YU7, which is positioned as a direct competitor.
The slump in sales follows a period of price adjustments by Tesla in China, including offering incentives such as zero-interest financing and subsidies, in an attempt to stimulate demand. However, these measures have not been sufficient to counteract the declining sales trend. Overall retail sales of electric vehicles in China were down 20% in January compared to the same month last year.
In 2022, Tesla sold over 439,770 Made-in-China (MIC) electric cars, a 37% increase year-over-year, despite challenges including lockdowns and production pauses. However, the current trajectory suggests a significant shift in the company’s fortunes within the world’s largest EV market.
