Tesla’s Chinese deliveries plummeted to an alarmingly low level last week, despite a surge in production of the new Model Y.
China and the United States are Tesla’s two most crucial markets.
Tesla generates a majority of its revenue, despite facing declining profitability, from within the United States and China, where it sources its supply. Despite strong sales volumes in China, the automaker struggles to generate significant revenue due to the prevalence of lower-priced rear-wheel-drive Model 3 and Model Y trim levels, which are sold at a discount with 0% financing offers to drive demand.
Although China remains crucial for Tesla, the company’s reliance on exporting electric vehicles from its Gigafactory in Shanghai to various markets, including Europe, underscores its significance.
Despite significant cuts to its automotive sales in China, Tesla continues to struggle to keep pace with rapidly ascending Chinese auto manufacturers.
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By contrast, last year’s delivery numbers have been outpaced thus far in 2025.
Despite returning to full production of Model Y, Tesla’s weekly deliveries continue to lag significantly behind 2024 ranges, as evident from the charts’ underside.
While Tesla’s reliance on exports might partly explain its decline in domestic Chinese deliveries, new data suggests that even the company’s export volumes from the country have also seen a downturn.
While Tesla’s Chinese delivery numbers trail behind, the electric vehicle (EV) market is gaining momentum, driven by BYD, SAIC, Geely, and other prominent players.
Tesla extended its 0% financing offer through June 30, the end of the quarter, in an effort to boost sales.
Electrek’s Take
In China, Tesla generates approximately $3,000 in profit per vehicle, largely due to the fact that more than 90% of its sales consist of Model 3s and Model Ys with no low-cost or incentive offerings?
Whenever considering sponsored financing, Tesla essentially breaks even on vehicles delivered in China.
If Tesla successfully ramps up its delivery pace, this situation could quickly take a negative turn.
The current pace of 3,000 to 7,000 electric vehicle deliveries per week is unlikely to be maintained. Despite initial reservations from some Tesla skeptics, the company has exceeded expectations by ramping up production to around 10,000 vehicles per week in China, largely thanks to the popularity of its latest Model Y.
The demand for the latest Mannequin Y appears to be less than expected.
