Tesla’s deliveries are sliding in China amid a perfect storm of factors dragging demand down, including Chinese buyers preferring Chinese brands amid the trade war with the US.

The American automaker is trying to counter the anti-American sentiment by emphasizing that its electric vehicles are ‘made in China’.

According to the China Passenger Car Association (CPCA), Tesla produced 58,459 Model 3 and Model Y vehicles at Gigafactory Shanghai in April.

That’s down 6% compared to last year.

That number is for all the vehicles Tesla produces in China, but it also exports about half of those to other markets.

Regarding deliveries in China, Tesla’s insurance registration data also points to Chinese deliveries being down this quarter compared to the same period last year and Q1 2025:

There are several different factors affecting Tesla in China right now. The biggest one is competition. China is the most competitive EV market with dozen of Chinese EV automakers producing vehicles in high volumes and great prices.

We previously reported on how some Chinese automakers are going after Tesla, particularly with Model 3 and Model Y competitors like Xiaomi, who are now eating Tesla’s lunch.

The trade war President Trump started with China is also having an impact. The pressure the US is putting on China, and the anti-China messaging, like VP JD Vance calling Chinese people “peasants”, has pushed Chinese buyers away from American brands.

Due to Tesla CEO Elon Musk’s closeness to Trump, Tesla is targeted in particular.

Tesla is trying to address the situation by focusing its messaging in China around the fact that all its vehicles are built in China with most parts coming from China.

In this post, the automaker wrote, “This is Tesla, this is ‘Made in China'”:

Tesla is also discounting its vehicles in China with subsidized 0% interest rates and direct discounts to counter lower demand.

Electrek’s Take

As I have been claiming for a while, Tesla is slowly but surely being squeezed out of the Chinese market by competition.

It’s hard for some people and analysts to see right now because Tesla is slowing down the decline in demand by virtually completely giving up on making money on vehicle sales in China.

I don’t think Tesla makes more than a few hundred dollars per car sold in China right now, and since last year.

This approach is helping camouflage Tesla’s downturn in China, but it is now starting to be more obvious.

Some are hoping for Tesla’s new stripped-down Model Y to help, but the truth is that the more downmarket you go in China’s EV market, the more competitive it gets.