Sales of U.S. automaker Tesla’s China-made electric vehicles skidded 17.8% in November from the same month a year earlier to 82,432 cars, China Passenger Car Association data showed on Monday. But deliveries of China-made Model 3 and Model Y cars rose 14.3% from October. Despite the drop, Tesla remains China’s EV sales leader — though it faces tough competition from local rival BYD.

BYD sold 229,942 electrified vehicles last month, including 113,915 pure electric vehicles, up by a record 92% yearly. It came within a few thousand vehicles of surpassing Tesla as China’s biggest EV maker this year, but the U.S. firm cut prices and offered incentives in late October to help reclaim the title.

The November sales were far above those of Nio and other Chinese EV startups, which saw their sales plunge by double-digits in October vs. September as the COVID-19 lockdowns hit demand and inventories. They have also been squeezed by the removal of government subsidies on EVs, which are being phased out starting next year.

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XPeng, which makes the G9 SUV and ET7 sedan, sold 10,912 China-made EVs last month, up by 50% from a year ago but still well below Deutsche Bank analyst Yu’s forecast of 14,000 EVs in Q4. Its November sales were helped by easing COVID-19 restrictions in some districts of southern China where it operates and by a relaunch of its premium SUV in late October.

Meanwhile, Tesla’s Gigafactory Shanghai set an all-time monthly record in November with 100,291 made-in-China EVs shipped to customers across the country and overseas markets. The figure includes 8,003 ES7 SUVs, 6,175 ET7 sedans, and 2,968 ET5s, all new models launched this year. It’s worth noting, however, that the CPCA only reports wholesale shipments and doesn’t track registrations or customer deliveries.

Despite the sales decline, Gigafactory Shanghai is on track to deliver more than 650,000 vehicles this year. This is a remarkable achievement because the plant only started production in June 2022. However, more is needed to help the company reach its production target of 500,000 units by the end of 2022. To reach the target, the factory must accelerate its capacity expansion. The plant can produce 25,000 vehicles per month, including both Y and three models. It must double its capacity to meet the annual sales target by next year. Given the current market situation, this will require substantial investment, which may not be feasible for Tesla; this may be one of the reasons why its shares are trading near their 52-week lows. The stock was down 4.9% in pre-market trading on Monday. It was below both the 200-day and 50-day moving averages. Its shares are down more than 40% since January. This is the third time the stock has been in this range this year.