Tesla’s China sales rise to record high in 2024 but global deliveries see first annual decline

BEIJING - US electric vehicle (EV) maker Tesla said on Jan 3 its sales in China rose 8.8 per cent to a record high of more than 657,000 cars in 2024, a strong performance in a competitive market in a year when its annual global deliveries fell for the first time.

Tesla’s sales in the world’s largest car market also increased 12.8 per cent in December from a month earlier to a record high of 83,000 units, according to Tesla China.

In 2024, Tesla delivered 36.7 per cent of its cars to customers in China, its second-largest market, based on the sales figures.

But global deliveries nonetheless slid 1.1 per cent, missing chief executive Elon Musk’s earlier prediction of slight growth from promotions including zero interest financing.

Instead, reduced European subsidies, a US shift towards lower-priced hybrid vehicles and tougher global competition,

especially from China’s BYD,

were a drag on sales.

Wall Street, however, expects demand to pick up in 2025 as the US Federal Reserve cuts interest rates.

With 2024 global sales of 1.79 million cars, Tesla was still narrowly ahead of BYD, whose EV sales grew 12.1 per cent to 1.76 million globally.

Tesla downsized its global workforce in 2024 in the face of tepid demand and stiffer competition from Chinese EV makers, and cut the size of its China sales team.

As an EV price war in China enters a third year, Tesla has extended a 10,000 yuan (S$1,875) discount on outstanding loans for its best-selling Model Y, as well as zero interest financing of up to five years for some Model 3 and Model Y cars until the end of January.

BYD, which has led a cost-cutting competition with its Dynasty and Ocean series of EVs and plug-in hybrids, overshot its sales target, with passenger vehicle sales up 41 per cent to over 4.25 million units in 2024.

The Chinese EV champion’s overseas shipments rose 71.9 per cent to 417,204 units, or 9.8 per cent of its global sales, missing its export target of 450,000 for 2024, as it faces a 17 per cent additional tariff, the lowest the EU has assigned Chinese EVs from China.

Nearly one out of five BYD cars sold out of China was in Brazil, where BYD and its contractor Jinjiang Group are facing investigations by the Brazilian authorities into the conditions of the Chinese workers at the construction site of a local BYD factory.

Tesla is also under pressure from legacy automakers.

Its October registrations in Europe fell by 24 per cent, owing to a tight race from Volkswagen Group, whose Skoda Enyaq sport utility vehicle (SUV) dethroned the Model Y as the best-selling EV in the region, according to data research firm Jato Dynamics.

In the US, Mr Musk has pivoted Tesla to self-driving taxis and had

backed US President-elect Donald Trump with millions of dollars in campaign donations

in the hope that it could bring regulatory relief for the company.

Mr Musk has said he plans to leverage his promised role as a government efficiency czar under the Trump administration to advocate for a federal approval process for autonomous vehicles to replace the current state-specific laws, which he described as “incredibly painful” to navigate.

Tesla’s autopilot and full self-driving technologies, which are not yet fully autonomous, have been

the subject of scrutiny due to lawsuits,

a US traffic safety regulator probe and a Department of Justice criminal investigation.

The key concern is whether

Tesla may have overstated the self-driving abilities

of its vehicles.

With self-driving technology still years away, analysts have said Tesla would have to rely on cheaper versions of current cars and the Cybertruck to achieve Mr Musk’s target of 20 per cent to 30 per cent sales growth in 2025.

The truck, known for its futuristic design, has been showing signs of demand weakness, analysts have said.

Tesla has yet to break out deliveries for the Cybertruck.

The company said on Jan 2 it handed over 471,930 Model 3 and Model Y vehicles and 23,640 units of other models, including the Model S sedan, Cybertruck and Model X premium SUV.

“Tesla will continue to lean on the planned launch of a new low-cost model in the first half of 2025 to stoke confidence on the opportunity for 2025 deliveries to grow year over year,” said Mr David Wagner, portfolio manager at Tesla shareholder Aptus Capital Advisors. BLOOMBERG, REUTERS