Tesla Stock Drops Over 7% in 2025 Amid Shanghai Gigafactory Delivery Decline and Rising Competition

Important Highlights

• Tesla's shares fell sharply following data revealing the lowest delivery numbers from its Shanghai Gigafactory in over a year.
• The Chinese Lunar New Year holiday and intensifying local competition contributed to the sales slowdown.
• Despite Tesla’s price incentives, Chinese EV makers like Xpeng and BYD continue to aggressively match discounts.

In 2024, Tesla Inc. (TSLA) experienced a significant stock decline, dropping more than 7% after reports showed that deliveries from its Shanghai Gigafactory reached their lowest point since December 2022. The dip is attributed to the seasonal impact of the Chinese Lunar New Year and mounting competition from domestic electric vehicle manufacturers.

According to preliminary figures from the China Passenger Car Association (CPCA), Tesla delivered 60,365 vehicles from its Shanghai plant in February, marking a 19% decrease compared to the previous year. This slowdown aligns with a typical seasonal trend but is further intensified by a broader contraction in new-energy vehicle demand within China.

In response to falling demand, Tesla has introduced insurance subsidies for its Model Y and Model 3 in China to stimulate sales. However, rivals such as BYD, backed by Warren Buffett, and Xpeng have matched Tesla’s aggressive pricing strategies. BYD recently cut prices on its Yuan Plus SUV by nearly 12%, while Xpeng extended a 20,000 yuan discount on its popular G6 SUV through March.

Consequently, Tesla’s shares closed at $188.14 on Monday, reflecting a loss of approximately 25% in value since the beginning of the year. The company faces increasing pressure to maintain market share in China’s highly competitive EV landscape.

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