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Tesla reported the first full-year drop in sales in its history as a public company Thursday, as increased competition and slowing demand for electric vehicles hit its results.
The company reported fourth-quarter sales of 495,570 vehicles, up 2% from what it sold a year earlier. But that left it far behind the 595,413 pure EVs sold by Chinese rival BYD in the quarter. Tesla’s full-year sales of 1.8 million vehicles nonetheless edged out BYD’s annual EV total by 24,000, to retain the title of world’s largest EV maker.
But Tesla’s total 2024 sales were down 1% from the 2023 total, the first time the company has reported that kind of drop. Tesla at one point was reporting annual sales growth of nearly 50% a year, and its 2023 sales total was up a solid 37% from 2022, so even a narrow decline represents a significant slowdown.
Tesla has faced increased competition not just from Chinese rivals like BYD but also from legacy global automakers such as General Motors, Ford, Volkswagen AG and Korean partners Hyundai and Kia. Even though those legacy automakers have only a fraction of Tesla’s EV sales, as they sell mostly traditional gasoline-powered cars, they are posing more competition.
Tesla has responded to the slowing demand by cutting vehicle prices, both in China and the United States. It has the advantage of being more profitable than its legacy automaker rivals, which are still losing money on their EV sales as they try to build sales volume and reduce costs.
Sales of EVs in general, however, continue to grow, both in the United States and globally, though at a slower pace than in the past.
Shares of Tesla (TSLA) fell more than 4% in early trading on the weak sales report. But they closed 2024 up 68% for the year. Almost all of that gain came after Election Day, as investors bet that Tesla will benefit from policies under the incoming Trump administration, given the key support for the president-elect from CEO Elon Musk.
