In a surprising shift, Tesla Inc. has ceded its top spot in global electric vehicle (EV) sales to China’s BYD Co. for the fourth quarter, signaling a change in the dynamics of the fiercely competitive EV market. Despite Tesla delivering more vehicles than anticipated in the last quarter of 2023, BYD’s broader lineup of affordable models in China propelled it to become the new leader in global EV sales.
Tesla reported delivering 484,507 vehicles in the final three months, slightly exceeding analysts’ average estimate of 483,173 deliveries. However, BYD surpassed these figures by selling 526,409 fully electric vehicles in the same period, securing its position as the leading EV manufacturer for the quarter.
While Tesla achieved its goal of delivering 1.8 million vehicles for the year, it fell short of Elon Musk’s ambitious projection made a year ago, which suggested the potential to produce 2 million cars. A series of price cuts aimed at boosting demand failed to generate enough traction to support Musk’s optimistic output target.
Analysts predict that Tesla is likely to deliver upwards of 2.1 million vehicles in 2024, despite uncertainties surrounding overall EV demand. The change in EV sales rankings underscores China’s growing influence in the global automotive industry, with the country potentially surpassing Japan as the world’s largest passenger car exporter in 2023.
While BYD now leads in quarterly EV sales, Tesla maintains its dominance in the United States, where BYD does not sell its vehicles due to import tariffs and other barriers. Tesla’s revenue and profit are higher than BYD’s, thanks to its premium-priced vehicles and concentrated sales on two main models, the Model Y SUV and the Model 3 sedan.
Tesla’s late entry into the competitive truck market with the Cybertruck launch has added a new dimension to its product lineup. Although Musk anticipates a slow ramp-up for the Cybertruck, analysts remain cautious about its potential penetration into the core, large pickup market used for work purposes.
Despite these challenges, Tesla continues to command a strong position in its key markets of the United States and China, with ongoing production in Fremont, California, and Shanghai. The company also expanded production to include the Model Y at its plants in Austin and outside Berlin.
