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Tesla has reported its first full-year drop in sales since becoming a public company, marking a pivotal moment for the electric vehicle (EV) giant. Despite selling 1.8 million vehicles in 2024—edging out Chinese rival BYD by 24,000 units to retain the title of the world's largest EV maker—Tesla's total sales were down 1% from 2023.
The company's fourth-quarter sales of 495,570 vehicles represented a modest 2% year-over-year increase but paled in comparison to BYD's 595,413 units sold during the same period. This slowdown is stark when contrasted with Tesla's previous years of nearly 50% annual growth.
Industry analysts point to increased competition and slowing demand as key factors. Legacy automakers like General Motors, Ford, and Volkswagen, alongside Korean giants Hyundai and Kia, are aggressively expanding their EV portfolios. Meanwhile, BYD and other Chinese manufacturers have captured significant market share with competitive pricing and advanced features.
In response, Tesla has implemented price cuts in key markets like China and the United States. Its strong profitability—unlike many rivals still struggling to turn a profit on EV sales—gives it an edge in weathering this competitive storm.
However, the broader EV market is also experiencing a slowdown. While global EV sales continue to grow, the pace has diminished compared to previous years. Tesla's shares fell over 4% in early trading following the sales report but closed 2024 up 68%, buoyed by investor optimism about potential policy support from the incoming US administration.
As Tesla navigates these challenges, its ability to innovate and adapt will be critical. The company's historical growth has reshaped the automotive industry, and even in a slower market, its influence remains undeniable.
