Tesla’s sales dropped last year for the first time in over ten years, as demand wavered and competitors accelerated.
The firm, headed by billionaire Elon Musk, delivered nearly 1.79 million vehicles last year, a decrease of around 1% from 1.8 million in 2023.
This occurs even after the company repeatedly cut prices last year to attract buyers and retain its position as the leading global seller of electric vehicles (EVs).
China’s BYD, on the other hand, seems poised to narrow the gap, having reported 1.76 million electric vehicle sales in 2024.
The total vehicle sales of the Shenzen company surged over 41% in 2024 compared to the previous year, exceeding 4.2 million.
The increase was primarily driven by the sales of its hybrid vehicles.
BYD markets 90% of its vehicles in China, where it has been increasing its advantage over foreign brands such as Toyota and Volkswagen.
It has gained from an increase in vehicle sales in its domestic market, as fierce competition reduced prices and government incentives motivated buyers to trade in their old cars for EVs or other more fuel-efficient alternatives.
Tesla regards China as an important market, yet it has seen a decline in its position against competitors as the price war continues.
The demand for electric vehicles has also weakened in various areas, including the US and Europe, posing challenges for numerous automakers.
Volkswagen, Ford, and General Motors were some of the firms that reduced sales projections or chose to postpone investments in electric vehicle technology last year.
At Tesla, CEO Elon Musk has attributed the decline in sales partly to the rise in borrowing costs since 2022, making purchases more costly.
Analysts have noted heightened competition and uncertainties regarding the brand as Musk intensifies his political engagement, which has been termed controversial.
Tesla sales decreased in the first half of 2024 before beginning to rise once more. In the last quarter of 2024, it provided roughly 495,000 vehicles, a 2% increase compared to the previous year and a record for the quarter.
However, the company’s stock price, which jumped over 60% last year, declined by 5% in morning trading, as the result was below the approximately 500,000 expected by analysts.
“If you fail to meet expectations, it can be rather challenging out there,” stated Christopher Carey from the Carnegie Investment Council.
Last month, Honda and Nissan announced they were engaged in merger discussions, as the two Japanese companies aim to combat competition from the Chinese automotive sector.
Earlier this month, the head of automotive giant Stellantis, Carlos Tavares, resigned immediately after a conflict in the boardroom.
His sudden departure from the firm – which owns brands such as Vauxhall, Jeep, Fiat, Peugeot, and Chrysler – occurred two months after Stellantis released a profit warning.
Certain governments have intervened to safeguard local businesses.
In October, the European Union implemented tariffs as high as 45.3% on imports of electric vehicles manufactured in China throughout the trade alliance.
The US has implemented a 100% tariff on electric vehicles from China, and President-elect Donald Trump is anticipated to impose additional duties on imports.
BYD continues to grow its presence in developing markets.
However, last month, it encountered a challenge in Brazil – its biggest foreign market – as officials stopped the building of a BYD factory, stating that workers resided in conditions akin to “slavery”.
BYD announced that it severed connections with the construction company in question and continues to adhere strictly to “compliance with Brazilian laws.”
