Tesla reports high sales despite global decline in deliveries

• Published On: 04 January 2025 at 18:44

Tesla announced on Friday that its sales in China will increase by 8.8% in 2024, reaching a record high of over 657,000 vehicles.

This strong performance in China comes as Tesla's global deliveries fell for the first time in history, indicating challenges in other markets.

Tesla's sales in the world's largest auto market also increased significantly in December, up 12.8% month on month to a record 83,000 units, according to Tesla China.

In 2024, Tesla delivered 36.7% of its vehicles to customers in China, making it the company's second-largest market by volume. However, the company's global deliveries fell by 1.1%, falling short of CEO Elon Musk's previous forecast of slight growth.

Exports from China also fell by 24%, owing to reduced European subsidies, increased competition from Chinese rivals such as BYD, and a shift in the US market towards lower-priced hybrid vehicles.

Tesla's China-made EVs, including exports to Europe and other markets, saw a 0.4% decrease in December compared to the previous year, with 93,766 units sold, according to data from the China Passenger Car Association.

This is Tesla's first annual decline in deliveries from its Shanghai factory. Full-year sales of China-made Model 3 and Model Y vehicles, including domestic and exports, fell by 3.3%. China's exports fell to around 260,000 units, the lowest since 2021, according to Reuters calculations.

Tesla's exports to Europe were further hampered by a year-long European Commission investigation into Chinese-made EVs, which resulted in a 7.8% tariff on Tesla vehicles from China in October.

Despite a global sales slump, the carmaker's record China sales reflect the current state of the global electric vehicle market. China remains the only major market experiencing strong growth, while other regions are slowing or declining. According to industry data, China accounted for 70% of global EV and hybrid sales in the first 11 months of 2024, accounting for more than 90% of the overall increase in EV and hybrid sales over the previous year.

Tesla's global sales in 2024 totalled 1.79 million vehicles, narrowly outpacing BYD, which reported a 12.1% increase in EV sales to 1.76 million units worldwide.

In response to declining demand and stiff competition from Chinese EV manufacturers, Tesla made strategic changes, including reducing its global workforce and its China sales team.

The company also extended discounts on its popular Model Y, offering up to a 10,000 yuan ($1,369.99) reduction on outstanding loans and zero-interest financing on select Model 3 and Model Y vehicles until the end of January 2025.

BYD, a major player in China's EV market, led a price-cutting competition with its Dynasty and Ocean series of EVs and plug-in hybrids. BYD exceeded its sales target, increasing passenger vehicle sales by 41% to more than 4.25 million units in 2024. The Chinese EV giant's overseas shipments increased by 71.9% to 417,204 units, accounting for 9.8% of its global sales.

However, it fell short of its 450,000-unit export target in 2024, owing in part to a 17% tariff imposed by the European Union on its electric vehicles. Despite this, Brazil has emerged as a key market for BYD, accounting for nearly one-fifth of the company's exports.

Meanwhile, BYD and its contractor, Jinjiang Group, are under investigation in Brazil for the working conditions of Chinese employees at a local BYD factory construction site.