Tesla rivals including BYD Co (HKG:1211, OTCQX:BYDDY), Xpeng Inc (NYSE:XPEV) and Xiaomi have posted strong delivery figures for March and the first quarter, pointing to a solid recovery in China’s auto market following a seasonally weak start to the year.
The releases set the stage for Tesla’s own first-quarter deliveries and production numbers on Wednesday, with early signs suggesting Elon Musk’s car company may be struggling to maintain its edge in the world’s largest electric vehicle market.
Li Auto, Zeekr and NIO Inc (NYSE:NIO) also posted rising March volumes, according to disclosures on Tuesday, with only China’s EV and battery champion, CATL, expected to report in the next 24 hours.
Tesla does not break out China sales monthly, but nationwide EV registrations suggest it had an OK quarter, capped by a strong end-of-quarter push. Even so, the contrast with local competition is growing starker.
Under the hood
Looking under the hood for more details, BYD reported March sales of 377,420 EVs, up nearly 25% year-on-year and 17% month-on-month. For the first quarter, it shifted just over 1 million vehicles – a 59.8% increase on the year, though down a hefty 34.3% compared to the final three months of 2024.
Seasonal distortions, including the long Lunar New Year holiday in February, have long been a feature of Chinese auto data. But the quarterly decline may raise eyebrows given BYD’s recent product refresh cycle.
A majority of BYD’s volumes still come from plug-in hybrids – a category the company has reinvigorated with longer-range technology.
However, the fully battery-electric (BEV) segment remains the battleground for prestige and global scale. In the final quarter of 2024, BYD outsold Tesla by nearly 100,000 BEVs worldwide. Whether it retained the crown in Q1 is uncertain, but the pace of March deliveries suggests it will be close.
Export strength also underpinned BYD’s performance. Overseas sales hit a new record of 72,733 in March, bolstered by stronger logistics and the ramp-up of its Thai assembly plant.
Elsewhere, XPeng – which has faced profitability concerns – reported 9,026 units delivered in March, a 29% month-on-month gain. Xiaomi, a smartphone giant turned auto upstart, saw early traction with its debut SU7 sedan, which began deliveries in late March after a heavily hyped launch. Exact volume figures were modest, but enthusiasm appears high.
Li Auto, which has leaned heavily into large premium hybrids, saw March deliveries rise to 28,984 units. Nio, meanwhile, continued to underwhelm. It delivered just over 11,000 vehicles in March – a 14.3% increase over February, but well below prior peaks. The brand, once hailed as China’s Tesla killer, appears stuck in neutral despite a product refresh and pricing adjustments.
Overall, China’s EV market looks to have regained momentum in March, following a weak January-February distorted by holiday shutdowns. With warmer weather and a spate of new models, volumes are expected to trend higher into the spring.
Tesla, by contrast, appears to be in something of a holding pattern. Price cuts, softer demand in key markets and an ageing model lineup have raised questions about the company’s competitive edge – particularly in China, where local brands now offer similar specs at lower price points and faster iteration cycles.
Wednesday’s quarterly delivery print will provide a crucial datapoint. But for now, China’s EV insurgents appear to have the momentum – and Tesla is the one playing catch-up.