Tesla experienced its first-ever annual sales decline since going public, as increased competition and slowing demand for electric vehicles (EVs) affected its performance. The company reported a 2% increase in fourth-quarter sales, reaching 495,570 vehicles, compared to the same period last year. However, Tesla still trailed behind its Chinese competitor BYD, which sold 595,413 pure EVs in the quarter.
For the full year, Tesla sold 1.8 million vehicles, surpassing BYD by 24,000 units to maintain its position as the world’s largest EV maker. Despite this, Tesla’s total sales in 2024 declined by 1% compared to 2023, marking the first time the company has seen a drop in annual sales. Tesla had previously been reporting strong growth rates, including a 37% increase in 2023 compared to the previous year. This small drop in sales reflects a significant slowdown in the company’s growth trajectory.
Tesla is facing increasing competition from both Chinese rivals like BYD and traditional global automakers such as General Motors, Ford, Volkswagen, and the Korean companies Hyundai and Kia. While these legacy automakers still sell mostly gasoline-powered cars and have a smaller share of the EV market, they are intensifying competition in the electric vehicle space.
In response to slower demand, Tesla has reduced prices for its vehicles in both China and the United States. Despite this, Tesla remains more profitable than its legacy competitors, many of whom are still losing money on EV sales as they focus on building sales volume and cutting costs.
While EV sales are still growing globally and in the U.S., the rate of growth has slowed compared to previous years.
Tesla’s stock dropped over 4% in early trading following the weak sales report, but it ended 2024 with a 68% increase in value. Much of this gain occurred after Election Day, as investors anticipated that Tesla would benefit from policies under the incoming Trump administration, particularly due to CEO Elon Musk’s strong support for the president-elect.