Tesla’s annual sales fell for the first time as Chinese competition crunches automakers

Back to the driving board… It’s a season of goal setting, and Tesla’s were a bit lofty. The EV icon said that it sold 495K vehicles last quarter, falling several thousand deliveries short of estimates. Its annual sales came in at 1.79M EVs, about 1% shy of its 2023 figure — for its first yearly sales decline. While some analysts think Tesla’s recent #s are less relevant to its success than CEO Elon Musk’s connection to President-elect Trump, Tesla’s shares were down 6% on the day.

• Warning lights: Tesla’s navigating the end of German EV subsidies, a US consumer shift from EVs toward hybrids, and tougher competition from lower-cost Chinese automakers like BYD.

• Tailgating: BYD outsold Tesla last quarter and closed the gap on the year, selling 1.76M EVs in 2024. The company, which also sells hybrids, recorded a combined sales surge of 40%+. Other Chinese EV makers, like Li Auto, XPeng, and Nio, also saw strong sales.

• Trump bump: Tesla shares saw a postelection surge and ended the year up 63%.

Traffic from China… Tesla isn’t the only automaker struggling to fend off Chinese rivals. Recently Honda and Nissan reportedly discussed merging to better compete with China’s growing carmakers. That competition was one factor in the struggles at Stellantis (its China sales fell 30% in Q3). Automakers took a hit despite help from the US and EU, both of which imposed substantial tariffs on Chinese EVs.