Key Takeaways
- Tesla’s retail sales inside China fell 66.1% in October to 8,817 cars, the lowest since July 2022, while exports from Shanghai rose 66.3%.
- Elon Musk calls the Model Y the best-selling car on Earth, but Tesla’s China volume now leans on exports as local rivals post record months.
- Third-quarter revenue fell 14% in the US and 8% in China, while other markets rose 32%.
- At 177x forward earnings, the stock is priced for autonomy, and weaker car sales leave less cash to build it.
Tesla (TSLA) just watched its Model Y beat the Toyota RAV4 in Australia, and Elon Musk took that a lot further.
The X account @cb_doge posted that the Model Y is “Australia’s best-selling passenger vehicle so far this year,” with 39,035 sold from January through October against 35,927 RAV4s. Musk’s reply on Nov. 6: “Tesla Model Y is the best-selling car of any kind on Earth.”
Then China’s October numbers came out on Monday. Tesla’s retail sales inside China fell 66.1% from a year earlier to 8,817 cars, the lowest since July 2022, according to China Passenger Car Association (CPCA) data.
Which, ouch.
Tesla’s China Cars Went Overseas
On paper, Shanghai had a fine month. Wholesale sales rose 10.3% to 67,829 cars, a tenth straight month of growth. But 59,012 were exports, up 66.3%, a record 87% of the total. October is usually export-heavy, but the domestic drop is measured against last October, so the calendar doesn’t explain it.
China’s market was weak too: CPCA data show passenger car retail down 27.1% in October and battery-electric retail down just 5.3%. Tesla, an all-electric brand, fell about 12 times as hard, while Geely, Chery, XPeng and Great Wall Motor posted record NEV wholesale months.
That matters, since China produced 22.1% of Tesla’s 2025 revenue. In the third quarter, China revenue fell 8% to $5.2 billion and US revenue fell 14% to $12.5 billion, while revenue from other markets jumped 32% to $10.3 billion.
Best-Selling, Depending on Who’s Counting
Musk’s claim has some support. Focus2Move ranked the Model Y the world’s best-selling model in 2025, even as its sales fell 9.3%. Statista put the RAV4 just ahead, at a little over a million. Either way, Tesla’s weak spot is China.
Exports Are Holding Up Tesla’s Numbers
Analysts still expect sharp growth after three flat years:
Hitting the 2026 estimate takes about $29 billion of fourth-quarter revenue, more than the third quarter’s $28.0 billion. Since June 30, analysts have raised 2026 revenue estimates 5% and cut 2026 earnings estimates 14%: more revenue, but lower expected earnings.
Exports have propped up margins too. Management credited a higher Asia-Pacific mix for lifting automotive gross margin excluding credits to 18.1% in the third quarter, from 16.3% in the second (15.4% a year earlier). A $260 million tariff refund helped as well. Overall gross margin has sat around 18% since 2023:
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The Cars Still Pay for Tesla’s Robots
Nobody buys Tesla stock for Model Y share. Musk has said Optimus and Cybercab will make up most of Tesla’s value, and he’s winding down Cybertruck production at Giga Texas around mid-2027 to make room for Cybercabs.
At 177x forward earnings, against a five-year average of 108x, investors are paying for autonomy profits. The cars fund that build, and Tesla’s operating margin was 2.6% in the third quarter, down from 5.8%. Tesla guides 2026 capex to more than $20 billion, cut from more than $25 billion, with $45.4 billion of cash and investments behind it. No bind, but every car Tesla can’t sell in China is a little less cash for Cybercab.
What Tesla Has to Show in China
At this multiple, I’d want Tesla’s China retail sales to stop falling before paying up for a robotaxi business the cars still fund. This isn’t one bad month: September’s 64,837 domestic sales were already down 9.35%, and October was a fifth straight annual decline. November’s CPCA data in early December will show whether that’s turning.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
