Getty ImagesTesla’s sales fell last year for the first time in more than a decade as demand slumped and competitors picked up the pace.
The company, led by billionaire Elon Musk, delivered about 1.79 million cars last year, down about 1% from 1.8 million in 2023.
This came despite the company repeatedly lowering prices last year to attract buyers and maintain its position as the world’s top-selling electric vehicle (EV) maker.
However, China’s BYD is likely to close the gap, reporting 1.76 million EV sales in 2024.
The company’s total car sales in Shenzhen increased by more than 41% year-on-year in 2024 to more than 4.2 million units.
This surge was primarily driven by sales of hybrid vehicles.
BYD sells 90% of its cars in China, widening the gap with foreign brands such as Volkswagen and Toyota.
The company has benefited from increased car sales in its home market as fierce competition has driven down prices and government subsidies have encouraged consumers to replace older cars with EVs and other more fuel-efficient options. .
Tesla also sees China as a key market, but it is losing ground to competitors as price competition intensifies.
Demand for electric vehicles is sluggish in other regions such as the United States and Europe, creating a challenge for many automakers.
Volkswagen, Ford and General Motors are among the companies that have cut sales targets or postponed investments in EV technology in the last year.
Tesla President Elon Musk claimed that one of the reasons for the slump in sales was the rise in borrowing costs from 2022 onwards, making the purchase price higher.
Analysts also point to increased competition and questions about the brand amid Musk’s growing political involvement and controversy.
Tesla’s sales slumped in the first half of 2024, but have since started to recover again. Approximately 495,000 cars were delivered in the last three months of 2024, an increase of 2% year-on-year and a new record for the quarter.
However, the company’s stock, which soared more than 60% last year, fell 5% in morning trading, falling short of analysts’ expectations of about 500,000 shares.
“If we don’t meet expectations, it could be a pretty tough situation,” said Christopher Carey of the Carnegie Investment Council.
Honda and Nissan confirmed last month that the two Japanese companies are in merger talks to counter competition from China’s auto industry.
Earlier this month, Carlos Tavares, the president of automaker Stellantis, resigned with immediate effect after a dispute at a board meeting.
His sudden departure from the company, which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler, comes two months after Stellantis issued a profit warning.
Some governments intervened to protect domestic companies.
In October, European Union (EU) tariffs of up to 45.3% on imports of Chinese-made EVs went into effect across the trade bloc.
The US has also imposed a 100% tariff on EVs from China, and President-elect Donald Trump is expected to impose further tariffs on imports.
BYD continues to expand its footprint in emerging countries.
But last month, the company faced difficulties in Brazil, its biggest overseas market, when authorities halted construction of a BYD factory because workers were living in conditions akin to “slavery.”
BYD said it has severed ties with the construction companies involved and remains committed to “full compliance with Brazilian law.”
