CHENGDU, CHINA - SEPTEMBER 28: Two women walk past the Tesla storefront on September 28, 2024, in Chengdu, China. Tesla continues to expand its presence in China, showcasing its electric vehicles and promoting its Gigafactory innovations. (Photo by Cheng Xin/Getty Images)
Cheng Xin | Getty Images News | Getty Images
Tesla's China-made electric vehicle sales rose over the first two months of 2026 from the year before, regaining some lost ground to China's BYD.
The combined January and February sales in Tesla's China-made EVs rose by more than 35% to 127,728, up from 93,926 in the previous year, according to data published Thursday by the China Passenger Car Association (CPCA).
The figure was adjusted to account for the seasonal sales slowdown during the two-week Chinese New Year holiday, which took place mid-February.
The combined sales volume from Tesla's Shanghai Gigafactory — which produces the Model 3 and Model Y for domestic and foreign markets in Europe, the Asia-Pacific and elsewhere — was second only to BYD, which reported a 36% decline in deliveries on year during the same period.
BYD unseated Tesla as the world's largest EV seller, on a calendar-year basis, for the first time in 2025, but Tesla's recent delivery figures suggest that demand remains relatively healthy, as the combined sales volume for Tesla's China-made EVs is still more than double that of the next closest automaker, Leapmotor.
Reuters also reported last week that new registrations for Tesla's EVs, a proxy for sales, rose broadly across Europe in February, most of which are exported from Tesla's Shanghai factory.
Stiff competition
Still, there is little indication that the American automaker is primed to catch up to BYD's sizeable lead in domestic and overseas sales.
BYD's new Blade battery and charging capabilities — touted to be able to achieve a 97% charge from 10% in just nine minutes — was unveiled last week to critical acclaim, as it was said to overcome common concerns over EV battery ranges.
BYD's growing overseas footprint also enables the Shenzhen-headquartered automaker to maintain a strong lead over its domestic competitors, with its export figures exceeding domestic sales for the first time in February.
"BYD's hedge is exports — [the company's] overseas sales crossed 1 million units in 2025 for the first time, a buffer purely domestic rivals can't match," Leon Cheng, head of the mobility practice at management consulting firm YCP, told CNBC.
Other automakers from China have also grown increasingly competitive by offering a wider spread of features at more affordable prices, chipping away at sales from both BYD and Tesla.
In February, Geely's Xingyuan was the best sold car model in China, beating offerings from Tesla and BYD, according to data from Autohome. In the month before, Xiaomi's YU7 SUV dethroned Tesla's Model Y as the best sold car in China.
In its report, the CPCA noted that March's finalized sales figures could provide a better gauge for the trajectory of the broader EV market.
"As various industries quickly return to normal operations after the Spring Festival holiday, the month-on-month growth in production and sales in March will be quite rapid," the CPCA wrote.
"The period following the Spring Festival is a crucial time for new product launches, with many manufacturers releasing a large number of new models," the Association added.
— CNBC's Evelyn Cheng contributed to this report.
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