AI and Siasun Robot & Automation have grand dreams, but the reality is harsh for electric cars: Tesla, Inc. (TSLA.US) has seen two consecutive years of decline in the Chinese market.

Although the shipping volume in December has slightly rebounded, the global leader in electric vehicles, Tesla, Inc., has seen a significant decline in shipments from its Chinese factory in 2025 compared to 2024. Led by the world's richest man, Elon Musk, this global automotive giant is facing difficulties as global sales slow down, losing its dual position as the top electric vehicle market share globally and in China. With BYD Company Limited, "We Xiaoli", Xiaomi, and other well-known Chinese electric vehicle manufacturers continuously launching new models with innovative features, competition in the Chinese electric vehicle market is becoming increasingly fierce. Tesla, Inc. has lost its titles as the market leader in China and the world's largest electric vehicle manufacturer, being surpassed by BYD Company Limited. According to preliminary statistics from the China Passenger Car Association, Tesla, Inc. shipped 851,732 electric vehicles from its Shanghai supercar factory last year, a decrease of about 7% compared to the same period last year. In December alone, 97,171 vehicles were shipped, making it the fourth month in 2025 to show a year-on-year growth rate. It is worth noting that the latest statistics do not break down the proportion of exports in China's shipments, but most vehicles are sold locally in the Chinese market. The above figure shows that Tesla, Inc.'s annual shipments in the Chinese market have declined again in 2025. Based on the annual sales/shipping figures for 2025, Tesla, Inc. has relinquished its position as the top global electric vehicle (EV/BEV) manufacturer to BYD Company Limited. Several media outlets and research institutions have made this conclusion based on annual delivery/sales data. The significant decline in the Chinese market for two consecutive years highlights the challenges Tesla, Inc. may face in one of its largest demand markets in the long run. While the market outlook for Tesla, Inc.'s valuation and fundamental prospects has shifted to focus on Tesla, Inc,'s exclusive AI supercomputer system for developing FSD full self-driving vehicles, Robotaxis (fully autonomous rental taxis), and an AI humanoid robot named "Optimus" by Tesla, Inc, the company's electric vehicle sales and automotive fundamentals have not been weakened to the point of insignificance. It remains the mainstay of current cash flow and balance sheet, as well as the foundation of FSD data loops and fleet size (Robotaxis ultimately need to be scaled up to vehicle production capacity and operation). More realistically, as the narrative of "Tesla, Inc. growth shifting gears," the market will still use deliveries, car gross margins, price competition, and regional share to calibrate short-term profitability and valuation safety margins - so the impact of sales on fundamentals is more akin to transitioning from a "sole storyline" to a "chassis and constraints": sales/gross margin determine "cash and investor capital tolerance," while FSD/Robotaxi/Optimus determine "upward valuation imagination and Tesla, Inc.'s fundamental prospects ceiling." In recent weeks, several media outlets and sell-side analysts have openly stated that Tesla, Inc. can maintain a high valuation despite declining deliveries, mainly relying on investors and "Musk believers" betting on the potential "platform-level" incremental profit pool in autonomous driving and Siasun Robot & Automation by Musk. Even Tesla, Inc.'s more cautious outlook on deliveries has been interpreted by some Musk believers as "short-term weakness in the automotive business does not hinder Musk's heavy bets on autonomous driving/Siasun Robot & Automation for significant revenue realization." However, this does not mean that the automotive business is unimportant, but rather that price factors at the margins lean towards "when, through what regulatory path, and at what scale can commercializable autonomous driving and Robotaxi be achieved." Previously, this large automotive company headquartered in Austin, USA, saw a jump in deliveries in the third quarter, mainly due to consumers actively buying electric vehicles in the US before a crucial electric vehicle subsidy deadline expired. However, with global countries, including the US, reducing support for electric vehicles, Tesla, Inc. continues to face challenges of weakened demand. Furthermore, although Musk has toned down his high-profile rebellious role in Western politics, consumer demand weakness remains a headwind for Tesla, Inc.'s global sales. In a challenging year (2025), Tesla, Inc. has ceded the title of "world's largest electric vehicle manufacturer" to BYD Company Limited, headquartered in China. Undoubtedly, the electric vehicle competition faced by Tesla, Inc. in the Chinese market is intensifying, with new and innovative electric vehicle manufacturers like Xiaomi launching technologically advanced and highly intelligent driving electric vehicle models that are gaining favor among Chinese consumers. Xiaomi's electric vehicle products directly target Tesla, Inc.'s Model 3 and Model Y. According to statistics from the China Automotive Technology Research Center and Bloomberg Intelligence, Xiaomi's YU7 sporty multi-purpose vehicle (YU7 SUV) has even approached the sales figures of the Model Y in China in some months; for example, in November, Xiaomi YU7 sold 33,591 units, compared to 33,935 units for the Model Y. Preliminary statistics from the China Passenger Car Association also show a slight increase of 4% in wholesale sales of vehicles, including plug-in hybrid vehicles and electric vehicles, to 1.57 million units in December 2025. According to Bloomberg Intelligence's calculations based on association data, new energy vehicle sales in China have grown by about 25% in the year. The Passenger Car Association will release the final annual sales data for 2025 later this month.