BEIJING, March 11, 2026, 22:37 CST
Tesla pushed out 58,600 China-made Model 3 and Model Y cars in February, a 91% leap from a year earlier. That’s a solid jolt for the EV maker in its largest international market, even though sales slipped 15.2% compared with January. Tesla shares finished Tuesday at $399.24, up 0.14%, and hovered near $400.71 early Wednesday.
The surge stands out in a soft market. Sales of passenger cars in China dropped to 950,000 in February, down from almost 1.4 million in January and marking a fourth consecutive year-on-year dip. Trade-in subsidies have tapered off, the real estate crisis continues, and the Lunar New Year trimmed the number of selling days.
Tesla’s leaning on a seven-year, low-interest loan offer in China to prop up deliveries. Pressure’s hitting everyone. BYD, the largest domestic competitor, reported a 65% plunge in February sales year-over-year—its worst in ages—and responded by rolling out its first big battery upgrade in six years.
The battery sector lent a hand too. CATL—Tesla’s major battery partner—posted a 57.1% jump in fourth-quarter profits, ahead of forecasts, while keeping its grip on 39.2% of the world’s EV battery market last year. BYD trailed far behind, underscoring that battery appetite hasn’t faded, even as China’s broader auto market cools.
Still, the market’s gaze is fixed well beyond Tesla’s auto business. “Investors are largely looking past the near-term fundamentals,” noted Matt Britzman, senior equity analyst at Hargreaves Lansdown, before Tesla’s January numbers hit. For Ken Mahoney of Mahoney Asset Management, the real test comes in 2026: will AI start to deliver “revenue + profit, not just spend as it is mostly now”? Reuters, after Tesla’s January earnings, reported revenue slipped around 3% in 2025. Reuters
That’s part of the reason investors now track driverless taxi developments right next to China numbers. Uber said Wednesday it had signed a multi-year agreement to bring Zoox robotaxis onto its app. Back in January, Reuters reported that Tesla aimed for mass production of its Cybercab in 2026, with plans to kick off Optimus manufacturing before year-end.
China’s EV space isn’t all heading in one direction. NIO delivered its first quarterly net profit on Wednesday, sending the stock up 14%. Still, Chief Executive William Li flagged trouble: “Memory chip is indeed a problem that in worst cases can lead to production suspension,” he said. The issue might tack on another 6,000 to 10,000 yuan per high-end EV. Reuters
Tesla faces a risk that February’s uptick was boosted by last year’s unusually weak numbers, casting doubt on whether momentum will last into spring. According to China’s auto association, sales of electric and plug-in hybrid vehicles—those capable of running on both batteries and fuel—dropped 30% over the first two months of 2026. Senior official Chen Shihua added that “export” numbers for March might also disappoint. Reuters
Tesla’s February numbers out of China look tidier compared with last year, but that headline only tells part of the story. Subsidies have faded, price wars drag on, and investors remain on edge for signs that autonomy will pay off. March and the entire first-quarter delivery figures could carry more weight than a single robust monthly print.
