Sometimes the math just doesn't work in your favor. Tesla Inc. (TSLA) is learning this lesson the hard way in China, where the company is staring down what appears to be its first-ever annual sales decline in the country.
The Numbers Tell a Tough Story
Here's the situation: Tesla sold 73,145 vehicles in China during November, according to data from the China Association of Automobile Manufacturers. That's basically flat compared to the 73,490 units moved in November 2024, which sounds fine until you zoom out.
The problem is what happened earlier in the year. Tesla's year-to-date domestic sales in China now sit at 531,855 vehicles through November. Last year's full-year total? A much healthier 657,105 vehicles. Do the math, and Tesla would need to sell 125,520 vehicles in December just to break even year-over-year.
That's not happening. Tesla's best retail month ever in China was December 2024, when it moved 82,927 units. Even if you count wholesale figures that include exports, the company's peak was around 94,000 vehicles back in December 2023. Tesla would need to shatter its own record by more than 30% while also keeping every vehicle in China rather than exporting any. Not exactly realistic.
Competition Heats Up
While Tesla struggles, the competition is thriving. BYD Company (BYDDY) (BYDDF) just posted record export numbers from China, shipping 131,935 vehicles overseas in November. That's up 325.9% year-over-year, which makes Tesla's flat sales look even worse by comparison.
The contrast is stark. While Tesla managed modest growth in the U.S. during the third quarter thanks to the federal EV tax credit expiration creating a rush of demand, China has been a different story entirely. The company faces both weakening consumer demand and intensifying competition from domestic Chinese brands that have gotten very good at making electric vehicles.
Broader Implications
It's not just domestic Chinese sales taking a hit. Tesla's wholesale figures, which include both domestic sales and exports from its Shanghai factory, tell a similar story. Through November, wholesale sales stand at 754,561 units, down 8.3% year-over-year.
That suggests Tesla's problems aren't limited to China itself. Vehicles produced at the Shanghai factory get shipped to neighboring regions, and if those export numbers are also declining, it points to broader demand issues across multiple markets.
For a company that's never seen annual sales decline in China since establishing operations there, this would mark an unwelcome first. Tesla and its investors are probably circling December 31st on their calendars, ready to close the book on 2025 and hope for better results when the new year rolls around.