Tesla reported its first full-year drop in sales in its history as a public company, facing increased competition and slowing demand for electric vehicles. In the fourth quarter, the company sold 495,570 vehicles, a 2% increase from the previous year. However, this figure lagged behind the 595,413 pure EVs sold by Chinese rival BYD during the same period.
Despite this, Tesla's full-year sales of 1.8 million vehicles managed to surpass BYD's annual EV total by 24,000 units, allowing Tesla to retain its position as the world's largest EV maker. Nevertheless, Tesla's total 2024 sales experienced a 1% decline from the previous year, marking the first time the company has reported such a drop.
Previously known for its annual sales growth of nearly 50%, Tesla's 2023 sales total saw a 37% increase from 2022. The current narrow decline signifies a notable slowdown for the company. Tesla faces competition not only from Chinese rivals like BYD but also from established global automakers such as General Motors, Ford, Volkswagen AG, Hyundai, and Kia.
Despite these challenges, Tesla has responded to the slowing demand by reducing vehicle prices in both China and the United States. The company holds an advantage over its competitors as it is more profitable, unlike legacy automakers that are still incurring losses on their EV sales as they strive to boost sales volume and cut costs.
While the overall sales of EVs are on the rise in the United States and globally, the growth rate has slowed compared to previous years. Tesla's shares fell over 4% in early trading following the weak sales report but closed the year with a 68% increase. The surge in Tesla's stock price occurred post-Election Day, with investors anticipating potential benefits for the company from policies under the incoming Trump administration, given CEO Elon Musk's support for the president-elect.
