Tesla $TSLA ( ▲ 0.09% ) saw a sharp split in performance for its China built vehicles in January. Domestic deliveries in China fell 45% year over year to 18,485 units, marking the lowest level since 2022.
At the same time, exports from Tesla’s Shanghai factory jumped 71% to 50,644 vehicles, the second highest export total on record.
Domestic Demand Weakens
China is Tesla’s second largest market, but competition from local EV makers continues to intensify. Domestic brands have been cutting prices aggressively, and changes to EV tax incentives have added more pressure.
The result was a steep drop in local deliveries, underscoring how challenging the Chinese EV landscape has become for foreign manufacturers.
Shanghai Plant Picks Up the Slack
While sales at home slowed, Tesla $TSLA appears to be leaning more heavily on overseas markets. The surge in exports suggests the company may be reallocating production toward Europe and other Asian regions where demand is stronger.
It remains unclear whether the export spike reflects genuine demand growth abroad or simply a strategic shift in distribution.
A Balancing Act in a Key Market
For Tesla $TSLA, China remains critical to its global production and sales strategy. The divergence between falling domestic deliveries and rising exports highlights the company’s flexibility, but also the competitive headwinds it faces in one of the world’s most important EV markets.