Tesla’s (TSLA) sales of electric vehicles (EVs) made in China slumped again for the eight straight month, due to intense domestic competition and a heated price war. The company is once again turning to owner referral rewards to boost sales on the mainland.
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According to the China Passenger Car Association (CPCA), Tesla sold 61,662 autos in May, down 15% year-over-year but up 5.5% from the 58,459 vehicles sold in April. TSLA stock fell 3.6% on the news yesterday.
Tesla Is Still Losing Ground in China
Tesla’s Shanghai factory manufactures the Model 3 sedan and Model Y crossover for the domestic market and also serves as an export hub for sales to Europe and other regions. In total, Tesla sold 292,875 EVs in the first five months of 2025, representing a 17.6% year-over-year decline.
On the contrary, domestic rival BYD’s (BYDDF) sales increased 14.1% year-over-year to 376,930 units in May, although this was slower than April’s 19.4% increase. Tesla’s EVs are facing an overall decline in demand, especially in Europe and the UK. CEO Elon Musk’s political stances, along with the company’s aging and costly EV lineup, are weighing on sales. However, Tesla’s revamped Model Y dominated EV sales in both Australia and Norway.
Tesla Revives Rewards to Boost Sales
China undeniably remains Tesla’s second-largest EV market, and the company is once again turning to owner referral rewards to boost sales on the mainland. In June, Chinese customers who buy a Tesla EV through an owner’s referral will get a discount of RMB 8,000 ($1,110) on optional body paint. Additionally, owners who give the referrals will earn Tesla points worth RMB 800 upon successful completion of purchase by the referral.
Tesla announced the offer through its Weibo account on June 5. The program applies to purchases made between June 5 and June 30, and includes both Tesla’s Shanghai-manufactured EVs and imported Model S sedans and Model X SUVs. Tesla has often relied on referral programs to boost sales during periods of weak demand, and these efforts have generally been effective. It remains to be seen whether Musk’s exit from the Trump administration and full-time return to running his businesses will revive Tesla’s future prospects.
Is Tesla a Buy, Hold, or Sell?
Analysts are remaining sidelined on Tesla stock due to ongoing challenges. On TipRanks, TSLA stock has a Hold consensus rating based on 16 Buys, 10 Holds, and 11 Sell ratings. Also, the average Tesla price target of $282.70 implies 14.9% downside potential from current levels. Year-to-date, TSLA stock has lost 17.8%.
