Here is my take before the details. I think Tesla (TSLA) stock still belongs in a long-term investor’s portfolio, but only for those who can stomach an elevated price-to-earnings multiple.
The China sales pop and the worldwide rollout of its driving software strengthen the bull case. Yet TSLA stock trades at a punishing valuation. So, I view Tesla as a name to accumulate on weakness.
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I have tracked Tesla’s slow shift from a carmaker to a software-and-robotics story for years. May’s numbers out of China are the kind of data point that keeps the story breathing.
China Sales Surge Signals a Recovery Across the EV Market
According to a CNBC report, sales of Tesla cars built in China rose 40% in May. Preliminary data from the China Passenger Car Association (CPCA) suggests that Tesla delivered 85,982 new energy vehicles (NEVs) from its Shanghai plant, a 39.4% rise from May 2025.
CNBC also noted Chinese automakers sold 1.36 million passenger EVs in May, up 12% from a year earlier and 11% above April.
Notably, BYD (BYDDY) snapped an eight-month slide with 376,990 deliveries, basically flat.
Leapmotor and Geely’s (GELHY) Zeekr both jumped more than 80%, while Nio (NIO) rose 62.3% and Xiaomi (XIACY) topped 30,000 deliveries.
Li Auto (LI) fell 18.4%, and XPeng (XPEV) slipped 4.1%.
The Global FSD Rollout Matters for TSLA Stock
The sales jump landed just as Tesla pushed its software into the world’s biggest car market.
Tesla said its Full Self-Driving (FSD) Supervised system is now available in China, CNBC reported, days after CEO Elon Musk joined a U.S. delegation at a Trump-Xi summit.
The report also noted that FSD already operates in markets such as the United States, Canada, Mexico, and South Korea. However, Beijing News reported that a group of 10 Chinese owners is suing Tesla, alleging that the company claimed FSD was available before full regulatory approval was granted.
Once broader approvals are in place, FSD could become a key growth engine. Further, Morgan Stanley estimates that partly to fully automated vehicles could be a $200 billion market by 2030 and $400 billion by 2035.
