Tesla finally gets some good news out of a key region

TSLA

The U.S. EV industry is at a crossroads.

Electric vehicle sales were on a record-setting pace through the first nine months of the year.

U.S. electric vehicle sales by year and market share of new vehicle sales

• 2025 (through September): More than 1 million units, 10.5% market share

• 2024: 1.3 million, 8.1% market share

• 2023: 1.2 million, 7.8% market share

• 2022: 800k 5.8%, market share Source: Cox Automotive

However, that surge was driven by the expiration of the $7,500 tax credit that U.S. consumers received for purchasing a new electric vehicle.

Once the tax credit expired, so did the record-setting sales pace.

Dealers sold 74,835 electric vehicles in the U.S. in October, according to Cox Automotive data, representing a 48.9% month-to-month decrease.

While a nearly 50% decline sounds troublesome, remember that buying activity was exceptionally robust in September due to the expiration of the tax credit.

However, the 30% year-over-year decline is just as worrisome.

“October marked a sharp reversal for the electric vehicle (EV) market as the expiration of the federal EV tax credit cooled demand after three months of accelerated sales,” said Stephanie Valdez Streaty, director of industry insights for Cox Automotive.

“Buyers rushed to secure incentives before the deadline, but once it passed, momentum slowed. Inventories climbed quickly, and pricing shifted upward for both new and used EVs, reflecting a market in transition.”

While the U.S. EV industry appears stalled, China's is accelerating.

Tesla Shanghai factory has a blowout month

Unlike the U.S. auto market, Chinese consumers have embraced electric vehicles.

The Chinese government has been pushing its citizens to adopt the green technology using cash, tax, and other incentives for purchasing EVs and hybrids.

World's top EV markets in 2024

• China: 6.4 million EVs sold

• Europe: 2.2 million EVs sold

• U.S.: 1.2 million EVs sold

• Rest of world: 1 million EVs sold Source: International Energy Agency

Tesla's sales in China dropped to a three-year low in October, largely due to increased competition from domestic rivals. However, the company received some positive news from the region this week.

Sales of Tesla vehicles made at its Shanghai Gigafactory jumped 9.9% year over year in November. Sales of Model 3 and Model Y vehicles made at the factory jumped 41% month over month, according to China Passenger Car Association data cited by Reuters.

The November increase was the largest in 14 months.

The increase was driven by the introduction of the new extended-range, rear-wheel-drive Model Y in November, which followed earlier launches of a longer-range Model 3 and the six-seat Model Y L in China.

Tesla had been lowering prices to garner market share in the country.

Related: History of Tesla & its stock: Timeline, facts & milestones

China EV industry is starting to show cracks

China not only sold more EVs in 2024 than the rest of the world combined, but it also nearly sold more plug-in hybrids (4.9 million) than the rest of the world sold EVs.

But BYD, the company most responsible for China’s green vehicle revolution, is now facing a period of slowing growth.

Tesla 2024 deliveries by region:

• China: 662,588

• U.S.: 617,618

• Europe: 372,434

• Canada: 46,314

• Rest of world: 135,272 Source: Troy Teslike on X (formerly Twitter)

Related: Tesla gets an answer for its FSD ambitions in Europe

On Sept. 4, BYD cut its 2025 sales target by as much as 16% to 4.6 million vehicles.

If those numbers hold, it would be the company’s slowest annual growth rate in five years. BYD had told investors earlier this year that it expected to sell 5.5 million vehicles, but after the latest quarter, those goals may prove a bit lofty.

At the end of August, BYD reported quarterly financial results, showing a profit that declined year over year for the first time in three-and-a-half years.

Related: Tesla Robotaxi makes a move to fulfill big Elon Musk promise

This story was originally published by TheStreet on Dec 2, 2025, where it first appeared in the Automotive section. Add TheStreet as a Preferred Source by clicking here.