Tesla Faces Ongoing Sales Slump in China Despite Model Y Revamp
Tesla’s sales in China dropped once again in July, with 67,886 electric vehicles sold, marking an 8.4% decrease year-over-year and a 5.2% drop compared to June. This continues a downward trend, as the company has seen yearly sales decline in nine of the last ten months, with June being the only exception—posting a modest 0.8% uptick.
In the first seven months of 2025, Tesla sold 432,360 vehicles in China, representing a 13.7% decline from the same period last year. Analysts attribute this slowdown to intensifying competition from domestic brands and weakened export demand. The Model Y, once a strong performer, is now struggling to maintain momentum against local rivals.
Model Y Still Leads, But Momentum Slows
At Tesla’s Shanghai Gigafactory, only the Model 3 sedan and Model Y SUV are produced. Among these, the Model Y stood out in 2024 as China’s best-selling vehicle, with 480,309 units sold, accounting for 74.6% of Tesla’s total sales in the country that year.
However, despite the release of a refreshed “Juniper” Model Y in January 2025, the model’s performance has continued to slide. In the first half of 2025, Model Y sales fell to 171,491 units, a 17.5% decrease year-over-year.
New 6-Seater Model Y L to Challenge Local Giants
In an effort to regain momentum and compete more effectively with China’s booming SUV and MPV segment, Tesla is gearing up to launch the Model Y L this fall. The new 6-seat variant is designed to directly target popular local models such as Li Auto L8, Onvo L90, and Aito M8.
According to data released by Chinese regulators in July, the Model Y L will feature a 150mm longer wheelbase and be 179mm longer overall than the standard 5-seater version. It will be powered by NMC (Nickel-Manganese-Cobalt) batteries supplied by LG.
With this expanded model, Tesla aims to reassert its presence in China's competitive EV market by appealing to family-oriented buyers and challenging domestic heavyweights on their own turf.
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