Tesla Experiences First Decrease in Annual Sales Figures
The organization announced quartersales of 495,570 vehicles, a 2% increase from the previous year's figures. However, this figured paled in comparison to the 595,413 electric vehicles (EVs) sold by Chinese competitor BYD within the same period. Despite this, Tesla's annual sales of 1.8 million vehicles surpassed BYD's total EV sales by 24,000 units, securing its position as the world's leading EV manufacturer.
However, Tesla's projected 2024 sales saw a 1% decrease compared to 2023, marking the company's first ever reported sales decline. Previously, Tesla was reporting annual sales growth of nearly 50%, and its 2023 sales total saw a substantial 37% increase from 2022. Even a minor decline signifies a significant slowdown in growth.
Tesla has encountered steep competition not only from Chinese brands like BYD but also from established global automakers such as General Motors, Ford, Volkswagen AG, and Korean partners Hyundai and Kia. While these legacy automakers account for only a fraction of Tesla's EV sales, as they mainly sell traditional gasoline-powered vehicles, they are presenting stiffer competition.
In response to this slowing demand, Tesla has implemented price reductions for its vehicles, both in China and the US. The company enjoys a significant advantage over its legacy automaker rivals, who are still incurring financial losses on their EV sales as they aim to boost volume and decrease costs.
On the brighter side, sales of electric vehicles in general continue to surge, both domestically and worldwide, albeit at a more modest pace than in the past.
Tesla's stocks (TSLA) dropped by more than 4% in initial trading following the dismal sales report. However, they concluded the year with a 68% increase in value. The bulk of this gain occurred post-Election Day, with investors speculating that Tesla will reap benefits from policies under the incoming Trump administration, thanks to the president-elect's strong support from Tesla CEO Elon Musk.
Despite the 1% decrease in Tesla's projected 2024 sales, the business continues to dominate the electric vehicle market with annual sales surpassing its closest competitor by a significant margin. However, the company has responded to slowing demand by implementing price reductions on its vehicles, aiming to maintain its competitive edge against established automakers entering the electric vehicle market.
