<div id="readability-page-1"><div>Tesla sales in China dropped to a three-year low in October, raising concerns the electric vehicle maker could see its first full-year sales decline in the country this year.Fierce competition from local rivals such as NIO and Li Auto — both reporting this week — and a bruising price war in the face of a down economy pushed Tesla's China sales to 26,006 last month. The U.S. automaker's share in the Chinese EV market shrank to 3.2% in October from 8.7% in September. &#34;Tesla is getting surrounded by a swarm of Chinese automakers — from above, below, left and right,&#34; Michael Dunne, CEO of Dunne Insights and auto analyst, told CNBC. &#34;Like a swarm of drones, each is taking some sales from the company with a target on its back.&#34;Tesla's newest direct competitor in the upper echelon of the Chinese EV market is Xiaomi. The smartphone maker's YU7 sports utility vehicle and SU7 sedan posted record sales in October despite accidents that raised concerns about the cars' safety.The auto newbie sold nearly 109,000 cars in the third quarter — compared with 170,000 for Tesla. Xiaomi's EV unit turned a profit for the first time.Late bloomer Leapmotor is pressuring Tesla, too. The Chinese EV startup was founded in 2015, but only this year started beating out its local peers in terms of sales and stock price. Analysts credit its in-house production for keeping costs down. Its C10 mid-sized SUV is priced at roughly half of a Model Y. Leapmotor also has a JV partnership with Europe's Stellantis.Leading EV sales in China this year is the Geely Geome Xingyuan. The hatchback is not a direct competitor to Tesla since it serves the cheaper end of the market with its sub $10,000 price tag. Yet it is an indication of where Chinese buyers are at — budget-conscious but looking for value.The Geome Xingyuan's success also highlights another trend — traditional automakers such as Geely making inroads in EVs. That trend is turning Huawei into a more notable Tesla rival. The Chinese tech giant partners with old-line carmakers like Seres, Chery, and Beijing Auto. The Aito M8, a Seres model, has become popular among high-end SUVs.Despite the steep competition, Tesla's Model Y is still holding up, ranking 6th in the overall market. At Tesla's annual general meeting this month, Musk said he expected the Chinese to approve the company's &#34;Full-Self Driving&#34; software in early 2026.Yet analysts say Tesla needs to refresh its models to keep pace with its local rivals.Tu Le, founder of consultancy firm Sino Auto Insights, sees 2026 as a &#34;pivotal year&#34; for Tesla in China.&#34;Reality is catching up to Tesla in China,&#34; Tu said. &#34;Tesla has done an admirable job via price cuts, non-price-cut price cuts and other tricks to maintain sales of almost five and four-year-old cars versus some of the world's most advanced EVs. But not keeping up with the Xiaomi's, BYD's and XPeng's seems to be finally starting to show itself in its monthly sales.&#34;Last month, Tesla reported its total third-quarter revenue increased 12% from a year earlier to $28.10 billion, following two straight periods of declines. Even with the overall revenue growth, Tesla's third quarter was marked by a continuing sales slump in Europe, driven partly by competition from EV makers like Volkswagen and BYD.</div></div>

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Tesla's sales in China dropped to a three-year low in October, raising concerns of its first full-year sales decline in the country. Fierce competition from local rivals like NIO, Li Auto, Xiaomi, and Leapmotor, along with a price war and economic downturn, contributed to the decline. Tesla's market share in China fell to 3.2% in October from 8.7% in September. Analysts suggest Tesla needs to refresh its models to keep pace with local competitors.

- Tesla's sales in China fell to a three-year low in October, with only 26,006 units sold, raising concerns about a potential full-year decline.  
- The company's market share dropped to 3.2% from 8.7% in September, amid fierce competition from local rivals like NIO, Li Auto, and Xiaomi, which recently reported strong sales.  
- Analysts suggest that Tesla must refresh its models to remain competitive, as traditional automakers and new entrants increasingly challenge its position in the Chinese EV market.

Here's what's behind Tesla’s 3-year sales low in China