Lunar holiday brings down sales of electric vehicles in China and imposes a significant setback for Tesla and automakers

The Chinese automotive market recorded a sharp slowdown at the beginning of this year, with the Ano Novo Lunar celebrations directly impacting the sales flow of new energy vehicles. Grandes local and international manufacturers faced difficulties in maintaining the pace of deliveries, resulting in numbers below expectations for the month of February. The retraction affects major names such as BYD and Tesla, which are dealing with a scenario of increasingly aggressive competition in the Asian region and are looking for strategies to reverse the temporary stagnation.

Impact on startups and sector downturn

The combined sales volume of leading electric vehicle startups, including Li Auto and XPeng, has seen a significant reduction compared to the same period in the previous year. Dados indicate that aggregate performance reached one of the lowest levels since the beginning of 2023, reflecting the shutdown of assembly lines and the reduction in commercial activity during the long holiday, which occurred between the middle and end of February.

Sector analysts point out that, despite the varied offer of models and onboard technology, seasonality exerted strong pressure on the immediate results of automakers. XPeng, for example, reported an annual drop of 50%, totaling just over 15 thousand deliveries, while Li Auto saw its numbers drop 5%, delivering around 26,400 vehicles. Esses data highlights the market’s sensitivity to industrial pauses and the need for robust logistical planning.

BYD Performance and Market Leaders

Giant BYD reported a significant drop in its passenger vehicle deliveries, marking a 41% decline compared to the previous year, with a total of 187,782 units. Este result represents the most severe annual decline faced by the company since 2021, signaling a moment of adjustment in internal consumption.

In the segment of purely electric models, the retraction was also felt, with 79,539 units sold, which means a reduction of 36%. Para To compensate for internal instability and the domestic price war, the manufacturer has sought to strengthen its export channels, reaching the milestone of 100,600 new energy vehicles shipped outside of China in the period, maintaining its global relevance.

Challenging scenario for Tesla

Although Tesla does not release official regionalized monthly numbers, industry indicators suggest that the North American automaker faced a decline of approximately 4% in annual volume at China during the last cycle, totaling around 631 thousand vehicles in 2025.

The brand’s strategy has focused on maintaining its installed base and continuous investment in artificial intelligence technologies as a long-term competitive differentiator. Globalmente, the company’s deliveries were also impacted, with a drop of almost 9%, reaching the mark of 1.6 million units, which reinforces the importance of a solid recovery in Chinese territory for the company’s financial balance.

Exceptions and strategic adjustments

Contrary to the predominant negative trend, Nio managed to present a robust growth of 57% in its deliveries, totaling 20,797 units and standing out as a notable exception among the major competitors in the sector. The automaker’s performance suggests that portfolio renewal and niche strategies can shield certain brands from general market fluctuations.

Meanwhile, other brands are stepping up offering financial incentives and price adjustments to revive demand and combat excess supply in certain segments, a tactic also adopted by Tesla with the extension of financing conditions. The expectation is that the end of the seasonal period will bring a gradual recovery, consolidating the positions of companies that best adapt to the new reality of tight margins and high competitiveness.