Tesla extends growth streak as China-made EV sales climb 39.4%

Tesla’s Chinese-made electric vehicle sales increased 39.4% year-on-year in May, marking the sixth consecutive month of growth as the company maintained its position against rising competition from domestic automakers, according to data from the China Passenger Car Association (CPCA) released on Tuesday.

Deliveries of Tesla’s Model 3 and Model Y vehicles from its Shanghai factory totalled 85,982 units during the month.

This figure includes vehicles exported to Europe and other international markets.

The total represents an 8.2% increase compared with April, the CPCA data showed.

The continued growth in China highlights the importance of Tesla’s Shanghai operations in supporting both domestic sales and global exports, particularly at a time when competition in the electric vehicle segment remains intense.

Europe sees recovery in demand

Tesla also reported a rebound in new registrations across several European markets in May, extending a recovery trend following earlier weakness in demand across the region.

The recovery comes as the broader European electric vehicle market continues to expand, with demand showing consistent growth across multiple segments.

In Spain specifically, registration data released by industry group ANFAC on Monday showed Tesla sold 1,690 vehicles in May.

This represents a 112.8% increase compared with the same month a year earlier.

The Spanish market performance contributed to Tesla’s broader upward trend in Europe.

It also reflected a wider industry shift, with electrified vehicle sales including both fully electric vehicles and hybrid models rising 43.6% during the first five months of 2026 compared with the same period in 2025.

Tesla’s own sales in Spain increased 43.8% over the same period, broadly in line with overall market expansion, indicating that its growth is tracking the wider electrified vehicle trend rather than significantly outpacing it.

Competitive pressure from Chinese rivals

Despite Tesla’s gains, competition from Chinese automakers continues to intensify, particularly from BYD.

BYD, Tesla’s biggest Chinese competitor, maintained strong shipments to Europe and other international markets.

The performance helped the company end an eight-month global losing streak, underscoring increasing pressure on foreign automakers in key growth regions.

The competitive landscape is also shifting from price-based competition toward differentiation in product offerings and technology development.

BYD has recently focused on strengthening its technological capabilities, including a pledge made last week to fully cover compensation and repairs for one year of accidents involving its City Navigation driver-assistance system.

Regulatory delays and technology gap

Tesla, in contrast, is still awaiting regulatory approval in China to launch its most advanced driver-assistance features.

The delay could affect its competitive positioning as local rivals continue to enhance their smart driving technologies.

The gap in deployment of advanced features has become a growing focal point in the competition between Tesla and Chinese automakers, particularly as software-driven capabilities become increasingly central to vehicle differentiation.

Market reaction and share performance

Despite reporting strong sales figures in Spain and continued growth in China, Tesla shares declined in premarket trading.

The divergence between operational performance and investor sentiment highlights ongoing uncertainty around Tesla’s competitive positioning and future growth outlook.

Musk–Altman rivalry returns to focus

The latest developments also come amid renewed attention on the long-standing rivalry between Tesla Chief Executive Elon Musk and OpenAI Chief Executive Sam Altman.

The two executives have previously clashed over the direction of OpenAI, including Musk’s lawsuit challenging the organisation’s transition from a charitable structure to a for-profit model.

That legal challenge ultimately failed after a jury rejected Musk’s claims, with timing cited as one factor in the decision.

As OpenAI expands further into robotics, investors are closely watching how increasing competition in advanced robotics and artificial intelligence could affect Tesla’s longer-term ambitions in what Musk has described as a key future growth area for the company.