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Two weeks ago, I wrote about a shocking January for Tesla in China. The company’s sales were down 45% year over year. 45%! There’s no excuse that it was January and January is a slow month — we’re comparing to January 2025! And even January 2025 wasn’t great. Tesla delivered 18,485 vehicles in January 2026, dropping from 33,703 in January 2025, in the world’s biggest EV market.
There was still the question of whether, for some reason, Tesla had shifted its delivery patterns and would end the quarter strong in China. Well … that’s not looking likely.
Reporting out of China indicates that customer delivery wait times are historically low. If you order a Tesla today in China, you can receive your vehicle within one to three weeks. Tesla is not sold out for the quarter, not even close. In fact, now buyers are waiting for some super-competitive discounts or bonus offers in order to stimulate sales, since they know Tesla has plenty of capacity and needs to move a lot more units before the end of the quarter.
Tesla has just extended some incentives to March 31 — ultra-low interest rates for 7-year financing packages and interest-free financing for 5-year financing packages. Yeah, if those make your eyes pop out a bit and trigger thoughts of financial bubbles caused by overextended, overly aggressive financing strategies, you’re in the same boat as me.
Remember that the Chinese government stepped in and required that no one sell new vehicles below the cost of producing them in order to try to get the EV price war in the country under control. Tesla can’t cut costs much to jack up sales, but I guess it can still offer wild financing packages to try to get reticent, more price-sensitive buyers over the line.
We’ll see what happens in a little over a month, but you have to really be stubborn to not see bright yellow warning flags for Tesla in China right now. In a market that is ultra-competitive and constantly getting excited about the latest tech and constantly evolving EV offerings, Tesla hasn’t brought anything really new to the market in a long time.
Maybe Chinese consumers come through with a swarm of last-minute purchases. We’ll see. I think what Tesla bulls are banking on now is simply “Full Self Driving” getting better and getting rolled out in China. This is what all the hope centers around in order to revive sales. But how many are starting to seriously worry about Tesla vehicle demand in the here and now?
The thing that doesn’t make sense to me is that Tesla could have been working on new models and significant updates at the same time that it’s been working on improving FSD, but Elon Musk decided that just wasn’t worth doing. It’s all about autonomous driving, only about autonomous driving, and that’s the end of the debate. For anyone wanting something else, “No soup for you!” (A Seinfeld reference for those who were lucky enough to enjoy the ’90s.) I also think that Musk and team just decided the Model Y and Model 3 were so popular that they could just rest on their laurels. It seems like Musk thought demand for these models could only go up, and greater model diversity wasn’t needed. Tesla didn’t need to play by normal auto industry rules. Yes, that was true a decade ago, but it’s clearly not true at the moment. But, again, we come back to the main point — it’s all about autonomy. Once the self-driving nut is cracked, nothing else matters. Demand will be infinite. And that should happen in about two weeks.
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