Tesla’s China-made electric vehicle sales increased sharply at the start of 2026, recovering part of the ground it had lost to domestic rival BYD in the world’s largest car market.
Data released by the China Passenger Car Association showed that Tesla delivered significantly more vehicles from its Shanghai factory during the first two months of the year compared with the same period in 2025.
The improvement came despite a seasonal slowdown tied to the Chinese New Year holiday in February.
While Tesla’s shipments grew strongly, competition across China’s electric vehicle sector has intensified, with local manufacturers expanding product lines, introducing new technologies, and pushing deeper into overseas markets.
Tesla China sales growth
Tesla delivered 127,728 China-made electric vehicles in January and February combined, according to data published Thursday by the China Passenger Car Association.
The figure represents a rise of more than 35% from the 93,926 vehicles recorded during the same period a year earlier.
The industry body adjusted the figures to account for the two-week Chinese New Year holiday that took place in mid-February, which typically slows production and consumer activity across multiple industries.
Vehicles produced at Tesla’s Shanghai Gigafactory include the Model 3 sedan and the Model Y sport utility vehicle.
The plant supplies the domestic Chinese market and export destinations such as Europe and the Asia Pacific region.
BYD maintains EV leadership
Despite Tesla’s rebound, China’s BYD continues to hold a strong lead in the global electric vehicle market.
The Shenzhen based automaker overtook Tesla in 2025 to become the world’s largest EV seller on a calendar year basis.
During the first two months of 2026, BYD reported a 36% decline in deliveries compared with the previous year.
Even so, the company still remained ahead of Tesla in overall volumes.
Tesla’s sales performance remained notable.
Shipments of its China-made vehicles were more than double those of Leapmotor, the next closest competitor behind the two industry leaders.
Chinese automakers intensify competition
Competition within China’s electric vehicle sector continues to grow as domestic manufacturers roll out new technologies and models aimed at attracting buyers.
BYD recently introduced an upgraded Blade battery and charging system that can charge from 10% to 97% in around nine minutes.
The development has drawn attention for addressing concerns about battery range and charging times.
The company has also expanded its overseas presence.
Export shipments surpassed domestic sales for the first time in February.
New models reshape China EV market
Other Chinese automakers are gaining ground by offering vehicles with advanced features at lower prices.
According to data from Autohome, Geely’s Xingyuan became the best selling car model in China during February, surpassing offerings from both companies.
In the previous month, Xiaomi’s YU7 sport utility vehicle replaced Tesla’s Model Y as the country’s top selling car.
The China Passenger Car Association said March sales figures may provide a clearer view of the market as production and retail activity typically rebound after the Spring Festival holiday and seasonal factory shutdowns.
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