Elon Musk’s Tesla struggles to maintain its dominant position in the global electric vehicle (EV) market. While the company has faced setbacks amid a slowdown in EV demand in the U.S. and Europe, Chinese automaker BYD has capitalized on strong growth in the domestic Chinese market.
Tesla reported on Thursday that it delivered 1,789,226 vehicles in 2024, marking a decline of 10,355 units compared to the previous year. The company’s quarterly deliveries of 495,570 units fell short of both market expectations (FactSet consensus: 498,000 units) and its own guidance. This is the first time in Tesla’s history that annual deliveries have declined year-over-year. A significant drop in Tesla’s sales in Europe during the fourth quarter played a major role in this downturn, as competitors expanded their market share. According to the European Automobile Manufacturers Association (ACEA), Tesla’s sales in Europe from January to November 2024 fell by 14%, reaching just 283,000 units.
The company is feeling sales pressure even in China—home to Tesla’s largest factory and a rapidly expanding EV market. Sam Fiorani, Vice President of AutoForecast Solutions, pointed out that while the Tesla Model Y remains the second best-selling EV in China, its sales growth is not keeping pace with the broader market. Model Y sales increased by around 5% through November, while overall EV sales in China surged by 8%.
Meanwhile, BYD, China’s largest EV manufacturer, has grown rapidly. On Wednesday, BYD announced it sold 207,734 pure electric vehicles (battery electric vehicles) in December. This brings the company’s total annual sales of pure EVs in 2024 to 1.76 million units, marking a 12% increase from the previous year’s 1.5748 million units.
As a result, the gap between BYD and Tesla has narrowed significantly, from 240,000 units in 2023 to just 30,000 units last year. BYD’s strong performance is primarily attributed to the rapid expansion of electric vehicle sales within China’s domestic market, where EVs quickly become a dominant segment of new car sales. On Wednesday, BYD celebrated the achievement on social media, proudly declaring, “China’s champion, the world’s champion.”