The company's local sales plunged 69% to 8,621 China-made vehicles vs. 28,138 units sold in June.
Tesla exported 24,347 China-made vehicles in the month of July.
Local sales declined ~16% in Q2 vs. Q1.
Last month, the automaker introduced a cheaper version of the Model Y in China at the starting price of ¥276,000 and also lowered the starting price for Model 3 sedans.
China's passenger vehicle sales dropped 6.4% Y/Y to 1.52M units for the month.
Chinese EV giant BYD (OTCPK:BYDDF) reported July EV sales of 24,996, up 109% vs. a year earlier. Its plug-in hybrid sales expanded 463% to 25,061.
Tesla is facing severe competition from local EV companies like Nio (NYSE:NIO), XPeng (NYSE:XPEV) and Li Auto(NASDAQ:LI) which has just raised $1.5B in its Hong Kong listing to fund research and development and infrastructure expansion.
In July, Li Auto delivered 8,589 cars, Xpeng sold 8,040 vehicles and Nio delivered 7,931 units.