Jan 3 2025: Tesla (NASDAQ:TSLA) reported a record 8.8% rise in China sales in 2024, delivering over 657,000 cars in the world’s largest automotive market. This robust performance contrasts with a global 1.1% decline in Tesla’s deliveries, marking the first annual drop in the company’s history.
In December alone, Tesla sold 83,000 vehicles in China, a 12.8% increase from November, according to Tesla China. The country accounted for 36.7% of Tesla’s total deliveries in 2024, solidifying its position as Tesla’s second-largest market.
Global Challenges Amid Chinese Competition
Globally, Tesla delivered 1.79 million cars, narrowly maintaining its lead over China’s BYD (SZ:002594), which sold 1.76 million EVs—a 12.1% annual growth. Tesla CEO Elon Musk’s earlier prediction of slight growth in global sales was unmet, with reduced subsidies in Europe, a U.S. shift toward lower-cost hybrids, and intensified competition, particularly from BYD, affecting performance.
Despite strong China sales, Tesla downsized its global workforce and cut its China sales team in response to muted demand and increasing competition from domestic EV makers.
Price War and Incentives
As the Chinese EV price war enters its third year, Tesla has extended a 10,000 yuan ($1,370) discount on outstanding loans for its best-selling Model Y. The company is also offering zero-interest financing for up to five years on certain Model 3 and Model Y cars until the end of January.
BYD, Tesla’s main competitor in China, surpassed its sales target with a 41% rise in passenger vehicle sales, delivering over 4.25 million units. The company’s global sales included a 71.9% increase in overseas shipments, totaling 417,204 vehicles. However, BYD fell short of its export target of 450,000 units as it faced a 17% EU tariff on Chinese EV imports.
BYD’s Global Expansion and Controversies
Nearly 20% of BYD’s exports were to Brazil, where the company and its contractor Jinjiang Group are under investigation by local authorities over labor conditions for Chinese workers constructing a BYD factory.
Tesla’s record China sales underscore its ability to thrive in a competitive market, even as global challenges and growing competition from BYD and other Chinese automakers continue to mount.
