On April 30, 2025, Tesla China released a video on its official social media channels, announcing that over 95 percent of the components in the Model 3 and the newly produced Model Y, manufactured at its Shanghai Gigafactory, are sourced from local suppliers.

This significant localization effort emphasizes Tesla's commitment to fostering local supply chains while also developing products aimed at the global market.

The video praised China's advancements in intelligent manufacturing, reflecting Tesla's strategic interest in the region.

This announcement follows a month-long sales promotion that concluded in April, which included attractive financing options for buyers of the Model 3 and Model Y, such as zero or low-interest loans and discounts on charging equipment.

The promotional activity highlights Tesla's focus on the Chinese market, a key area in which the company is working to sustain its global sales performance amid challenges in other regions.

Wu Shuocheng, an automobile industry analyst, noted the strategic advantages offered by Tesla's localized supply chains, which present reduced risks and costs, particularly in light of the high tariffs placed on imports from the US. This focus on localization is part of Tesla's broader strategy to remain competitive, especially as sales diminish in markets such as Europe.

In its first-quarter report for 2025, Tesla recorded 336,681 vehicle deliveries, marking a 13 percent decrease compared to the previous year.

Sales in Europe, notably in the UK and Germany, saw significant declines of 62 percent and 46 percent year-on-year, respectively, indicating tough market conditions.

The strength of China's manufacturing capabilities and its resilient industrial chains are crucial for Tesla to maintain output and deliveries both domestically and internationally.

Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, commented on the ongoing challenges in the US and European markets, suggesting that such promotional efforts are essential for sustaining consumer confidence in the Chinese market.

Data from the China Passenger Car Association indicated that Tesla's retail sales in China reached 74,127 units in March, an 18.8 percent increase from the same month in the previous year.

During that period, Tesla's retail market share in China also rose to 7.5 percent, the highest share recorded since April 2024.

Additionally, Tesla's Shanghai Gigafactory has an installed annual vehicle production capacity exceeding 950,000 units, making it the largest among Tesla's global manufacturing facilities.

In mid-April, the factory completed its first overseas shipment of the new Model Y, loading 3,499 Tesla electric vehicles onto a roll-on/roll-off ship in Shanghai.

In a further expansion of its operations in China, Tesla began production at its Megafactory in Shanghai in February 2025. This facility is significant for Tesla's supply of energy-storage batteries and has already begun exporting its first batches of Megapack batteries shortly after commencing operations.