Although the overall Chinese electric vehicle market cooled at the beginning of 2026, Tesla achieved its third consecutive month of sales growth, with a year-on-year increase of 9% in January in the Chinese market.
Although the overall electric vehicle market in China cooled at the beginning of 2026, $Tesla (TSLA.US)$ BYD achieved sales growth for the third consecutive month against the trend, with January sales in China increasing by 9% year-on-year.
According to preliminary data released by the China Passenger Car Association on Wednesday, the automaker led by Elon Musk delivered 69,129 vehicles from its Shanghai factory in January.
Despite the imposition of a 5% vehicle purchase tax on new energy vehicles and plug-in hybrid vehicles domestically this year, and a significant reduction in replacement subsidies for entry-level models, Tesla continued to attract consumers through promotional policies such as ultra-low-interest seven-year auto loans and an 8,000 yuan (approximately $1,153) car insurance subsidy.
The Passenger Car Association stated that the overall wholesale sales volume of domestic new energy vehicles (including all-electric and plug-in hybrids) in January remained basically flat, with a slight increase of 1% to 900,000 units. The organization did not separately disclose export data.
Previously fast-growing domestic new energy vehicle startups also experienced sales declines this time. XPeng Motors (XPEV.US) saw a 34% drop in deliveries in January; Li Auto (LI.US), known for its range-extended hybrid models and considered the most resilient among new forces, also experienced an 8% decline in deliveries. However, it is worth noting that January and February each year are traditionally a slow season for the auto market due to the impact of the Spring Festival holiday.
The current industry weakness indicates that China's new energy vehicle market has entered a mature development stage. Tesla is hoping that its Full Self-Driving assistance system (which still requires full driver supervision) will gain domestic market approval to maintain its premium brand positioning; meanwhile, domestic competitors are also stepping up efforts to develop similar intelligent driving technologies and continue to deepen their presence in the hybrid vehicle market.
For $BYD COMPANY (01211.HK)$ 、 $GEELY AUTO (00175.HK)$and other automakers, changes in the domestic market are accelerating their pace of globalization. Overseas deliveries have been a bright spot for BYD, surging over 50% year-on-year, and overseas sales now account for nearly half of its total sales.