Tesla regained its crown from BYD, but demand for all-electric vehicles is softening
Tesla delivered ~9% fewer vehicles in Q1 of this year than it managed a year prior — the first time its quarterly sales have fallen since the pandemic-induced drop of 2020. The company still shipped some 387,000 cars, giving Tesla back the “world’s largest EV producer” title — a boast it had previously lost to the Chinese battery-producer-turned-automaker BYD, which posted an even more dramatic 42% fall in its deliveries.
The news sent Tesla shares down 5% yesterday, capping a tough start to the year that saw TSLA notch the worst Q1 performance of any stock in the S&P 500 index.
Having been the industry trailblazer for so long, Tesla is now facing increased competition, relying on its aging Model Y and Model 3 to keep its sales engine ticking over — all while battling factory fires, shipping delays, and labor disputes in the Nordics. To jumpstart demand, the company has turned to price cuts (many of them) and even embraced advertising for the first time, after years of resisting.
Somewhere in the middle
Ultimately, however, both Tesla and BYD are battling gravity, as the market for all-electric vehicles softens. Indeed, a recent YouGov survey suggests that the problem might be more deep-rooted, with Americans increasingly skeptical about the true environmental impact of going electric, while the common worries of range anxiety (particularly in cold weather) and cost haven’t gone anywhere.
Ironically, sales of hybrid vehicles (+65% in 2023) are now rising faster than their all-electric counterparts (+46%) — Toyota has reported soaring sales of its iconic hybrid Prius series.
