Tesla (TSLA) aims to regain momentum in China’s electric vehicle (EV) market. The company lost its top spot to domestic rival BYD Co. (BYDDF) for the first time in annual sales in 2025. In response, Tesla has launched zero-interest loans on its Model 3 and Model Y in China. According to the China Passenger Car Association (CPCA), Tesla’s wholesale deliveries in China reached 851,732 units in 2025, marking a 7% decline from 2024.
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Tesla faces stringent competition from local car manufacturers amid a heated price war and declining EV demand from cost-conscious customers. In addition, CEO Elon Musk’s political activities have sparked consumer backlash, hurting sales, particularly in Europe. Tesla’s market share has fallen below rivals like Volkswagen (VOW3) and BMW, per ACEA data. Moreover, Tesla’s margins are shrinking due to pricing pressure in China.
Tesla’s Financing Push in China
To win back customers, Tesla is offering zero-interest loans of up to five years and ultra-low-rate, seven-year loans. These apply to Model 3, Model Y, and Model Y Long Range vehicles bought before January 31, 2026. These promotions represent the EV maker’s latest effort to boost its slowing sales. Tesla rolled out similar offers on some models last year.
Tesla Is Losing Ground to BYD
Tesla lost the global EV race to BYD, which delivered about 2.26 million full EVs in 2025, while Tesla sold only 1.64 million EVs. Adding BYD’s plug-in hybrids (PHEVs), its total electrified vehicle sales reached a massive 4.6 million units.
Globally, EV sales rose about 28% year-over-year in 2025. BYD’s EV sales climbed by roughly the same margin, though its PHEV sales declined 7.9%. Meanwhile, Tesla’s annual sales fell 8.5% year-over-year amid competition and economic headwinds.
Nonetheless, Tesla remains a leader in premium battery EVs. It commands higher average prices of over $45,000 per vehicle versus BYD’s $15,000 to $25,000 range, and advances in autonomy like Full Self-Driving (FSD).
Should You Buy Tesla Stock?
Analysts remain sidelined on Tesla stock due to its ongoing challenges. On TipRanks, TSLA stock has a Hold consensus rating based on 13 Buys, 10 Holds, and eight Sell ratings. The average Tesla price target of $395.89 implies 12.4% downside potential from current levels. Over the past year, TSLA shares have gained about 10%.
