Tesla's China-made electric vehicle (EV) sales saw a 6% year-on-year decline in April, a continuation of a seven-month downward trend, reported Reuters.

The US automotive giant is facing stiff competition from Chinese rivals and a diminishing reputation in Europe.

According to the China Passenger Car Association (CPCA), deliveries of China-made Model 3 and Model Y vehicles, which include exports to Europe and sales within China, totalled 58,459 units in April, a 25.8% decrease from March.

The sales drop in Europe has been particularly pronounced, with consumers turning away from Tesla due to CEO Elon Musk's political affiliations. This sentiment has also affected the brand's performance in the US.

In response to declining sales in these key markets, Tesla is seeking to expand into new territories such as India and Saudi Arabia.

However, Chinese EV brands are also eyeing these markets for potential growth.

Tesla's Chinese competitor BYD experienced a surge in global passenger vehicle sales, with a 19.4% increase year-on-year to 372,615 vehicles in April.

The company's Ocean and Dynasty line-ups of EVs and plug-in hybrids are contributing to its success.

Furthermore, approximately a dozen new electric crossover models, unveiled at the Shanghai auto show, are positioned to compete with Tesla's Model Y, potentially exacerbating the challenges faced by the US EV specialist in China and worldwide.

To safeguard its market share in China, Tesla plans to start mass production of a more affordable version of the Model Y in Shanghai by 2026.

Also, Tesla has seen a 20% drop in automotive revenues for Q1 2025, with earnings falling to $13.97bn from $17.38bn in the previous year.