Since the first year of the paandemic, Tesla posted their first annoual drop in sale as elevated electric vehicle competition from Chinese and Western automakers flood the market.
Tesla reported that it built 433,000 vehicles but delivered only 387,000, down from 484,507 cars it delivered in the final three months of 2023. It is also down from the 422,875 vehicle sales in the first quarter of last year.
Tesla has reacted to heightened competition by reducing prices. Despite being more profitable than conventional automakers, these price reductions have begun to compress the profit margins that previously bolstered the company’s stock. Additionally, investors’ anticipation of future sales growth had been propping up Tesla’s elevated stock price, solidifying its position as the world’s most valuable automaker.
Tesla’s shares experienced a 5% decline on Monday and have plummeted by over a third in value since the beginning of the year.
Tesla attributed declining volumes to several factors: production ramp-up of the updated Model 3 at its Fremont factory, factory shutdowns due to diverted ships from China to Europe, and a week-long closure of its German factory following an arson attack. However, increased competition in the EV space also played a significant role. In the fourth quarter, Tesla lost its title as the world’s best-selling EV maker to Chinese automaker BYD.
Despite a sharp drop in Tesla’s sales, it reclaimed the global title from BYD, which saw an even steeper decline in sales of pure battery-powered vehicles compared to the previous year. BYD reported selling only 300,114 EVs, excluding hybrids, in the first quarter, down from the 525,409 sold in the final quarter of 2024.
But unlike Tesla, BYD’s EV sales were up 13% compared to the year earlier period, when it sold only 264,647 battery-powered cars.
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