Tesla Registrations Jumped Last Week in China Amid Global Slump

Registrations of Tesla (NYSE: TSLA) cars in China rose almost 80% week-over-week to 15,500 last week. Registrations are a good proxy for deliveries, and the weekly rise is a welcome break for Tesla investors at a time when its sales in most markets have been falling.

Meanwhile, while Tesla’s registrations jumped last week in China, the registrations in the first 11 weeks are almost 17% lower than the corresponding period last year. Moreover, registrations are down about 7% so far in 2025.

Sales from TSLA’s China Gigafactory Have Fallen

Tesla’s sales from the China Gigafactory have fallen in the first two months of this quarter. The factory produces cars for the domestic Chinese market and also exports to parts of Europe.

There is a fierce price war in the Chinese electric vehicle (EV) market as companies have been cutting prices and offering incentives to spur sales. The Chinese auto market is among the most competitive globally, and domestic players are increasingly taking market share from foreign brands like Volkswagen and Ford. The price war only escalated after BYD cut prices on many of its models, especially those in the budget range.

BYD Looks Set to Surpass Tesla in 2025

In Q1 2025, BYD sold over 1 million cars, and its battery electric vehicle (BEV) sales were ahead of Tesla despite the first quarter being seasonally weak in China due to the Lunar New Year Holidays. The company is targeting deliveries of 5.5 million this year and is particularly witnessing strong demand for its BEVs. BYD’s sales in global markets have also been quite strong, and it is targeting deliveries of 800,000 in international markets this year.

Looking at the strong growth in the first five months of the year, BYD looks set to become the world’s biggest seller of BEVs in 2025 and hit yet another milestone.

Notably, in 2011, Tesla CEO Elon Musk laughed at the possibility of BYD becoming a competitor to Tesla. However, the Chinese company has proven critics wrong and has emerged as a serious competitor to Tesla, not only in China but also in global markets.

BYD’s annual revenues rose 29% YoY to $107 billion last year, while Tesla’s revenues were around $97.7 billion. The steep rise in BYD’s sales was led by a record 4.27 million deliveries – well ahead of Tesla, which reported a YoY fall in its 2024 deliveries – the first in the company’s history.

Tesla Reported a Fall in Q1 Deliveries

Tesla is meanwhile battling a severe slowdown, and the slump continued in Q1 2025, with Tesla producing 362,000 vehicles and delivering 332,000 of them. For context, the US EV giant delivered 386,810 vehicles in the corresponding quarter last year. Its Q1 shipments were in fact the lowest in almost three years.

In April, its US registrations fell 16%. The numbers don’t come as a surprise, as there were signs that Tesla’s sales were weak in the US, its biggest market. In May, the company cut the financing rates for its new Model Y in the US. While it is usual for the company to offer incentives towards the end of the quarter, this time around, it offered the discount just about a month into the quarter, and that too on the latest version of its best-selling vehicle.

Tesla is offering “1.99% APR or $0 Due at Signing available for well-qualified buyers,” which implies a discount of a few thousand dollars on the model. Notably, Model Y is the best-selling vehicle globally, not only in the EV space but across all vehicle types. The company launched its long-awaited refreshed version of the aging model earlier this year, but the discounts suggested that the demand for the model is perhaps not as strong.

Tesla Is Expected to Report a Fall in Q2 Deliveries

Tesla will release its Q2 deliveries early next month, but looking at the sales slump, it looks like another dismal quarter. Current estimates call for Tesla’s Q2 deliveries to come in at 399,000, which is 10% lower than the corresponding quarter last year. Analysts have been lowering the company’s delivery forecast gradually as incoming data has shown that its sales in most markets have failed to recover.

Some analysts believe that even the current estimates are too high, and Guggenheim expects Tesla to deliver only 360,000 cars in Q2.

Notably, last year, during Tesla’s Q3 2024 earnings call, CEO Elon Musk said that the company’s 2025 deliveries might rise by as much as 30% as it prepares to launch new vehicles. However, the company toned down its forecast while releasing its Q4 2024 earnings, and in the shareholder deck, it said, “With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025.”

The commentary was even somber in the Q1 2025 shareholder deck, where the company said, “the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment.” While Tesla did not update its 2025 guidance, it said, “We will revisit our 2025 guidance in our Q2 update.”

Robotaxi Launch

Meanwhile, while Tesla’s sales have sagged in recent months, optimism is building over the launch of its robotaxi service. Musk has set June 22 as the tentative date for the company’s ambitious robotaxi launch in Austin. The launch is, however, facing protests in Austin over safety concerns. Last week, demonstrators showed how a Tesla with its full self-driving (FSD) software zoomed past a school bus that had a stop sign held. The car also ran over a child-sized mannequin that the demonstrators had put in front of the vehicle.

Notably, the FSD is far from perfect, and US regulators are investigating several cases of crashes involving the software.