Chinese electric vehicle market plummets in February: Tesla and rivals affected

The electric vehicle market in China has seen a slow start to 2026, with significant drops in February sales for most manufacturers. Tesla faces additional pressures in this scenario, as the country represents an important share of its revenue. Fabricantes places like BYD, XPeng and Li Auto released lower-than-expected numbers, influenced by the Ano Novo Lunar long holiday. The slowdown comes after a 2025 marked by an annual decline in deliveries from Tesla to China.

Combined sales of Nio, Li Auto and XPeng totaled 62,474 units in February, a 10.6% decrease compared to the same month last year. Esse performance represents the worst monthly result since January 2023. The Ano Novo Lunar holiday, which occurred between February 15 and 23 in 2026, impacted production and deliveries across the sector. Analistas note that the Chinese market remains highly competitive, with more options available to consumers.

Sharp falls between main rivals

BYD delivered 187,782 passenger vehicles in February, which represents a 41% drop from the previous year. Of the fully electric vehicles, there were 79,539 units, a reduction of 36%. The automaker faces its most severe annual decline since 2021 amid intensifying local competition. Exportações of new energy vehicles totaled 100,600 units in the period.

XPeng reported 15,256 deliveries, a 50% decrease year-on-year. Li Auto delivered 26,421 vehicles, down 5%. Esses numbers reflect seasonal pressure and increased supply in the Chinese market. Nio stood out with 20,797 units, a growth of 57% compared to the previous year.

Performance of Tesla in the Chinese market

Tesla does not disclose regional monthly sales directly, but industry data indicates that volume in China in 2025 reached around 631 thousand vehicles, a reduction of approximately 4% compared to the previous year. Esse result marked the company’s first annual drop in the country. Globalmente, Tesla deliveries totaled around 1.6 million units in 2025, with a decline of almost 9%.

China represented 22% of Tesla’s total revenue in 2025. Electric vehicle sales continue to be the company’s main source of cash generation, directed towards investments in artificial intelligence. The Chinese market remains strategic, despite recent variations.

Factors influencing the sector

The Ano Novo Lunar holiday affected the operations of several manufacturers, with prolonged factory shutdowns. Domestic demand in China showed signs of slowing at the beginning of 2026, after significant growth in previous years. Intense competition led to price adjustments and financial incentives on the part of automakers.

Chinese manufacturers have expanded financing options and price reductions to maintain volume. Tesla also adopted similar measures, such as extended financing terms in its portfolio at China. The sector faces excess supply in some segments, which puts pressure on margins.

Impact on actions and perspectives

Tesla shares are up around 37% over the past 12 months through early March 2026. Esses projects can influence share values ​​more than quarterly variations in electric vehicle sales.

The slowdown in the Chinese market increases the relevance of revenue diversification. Tesla maintains a focus on technological innovations to sustain long-term growth. The electric vehicle sector in China remains the largest in the world, with potential for recovery after the seasonal period.

Competitors with mixed performances

Nio recorded the only significant growth among the major players in February. The automaker expanded its presence with new models and market strategies. Outros manufacturers adjust plans to face the competitive environment.

BYD maintains global new energy vehicle volume leadership despite recent declines. The company expanded exports to compensate for variations in the domestic market. The dynamics of the sector indicate consolidation among the main names.