In 2024, Tesla’s sales in China reached a new high, defying the global decrease

In a year when its yearly global deliveries declined for the first time, U.S. electric vehicle manufacturer Tesla (TSLA.O), which opens a new tab, announced on Friday that its sales in China increased 8.8% to a record high of over 657,000 cars in 2024. This is a great result in a competitive market.

According to Tesla China, the company’s sales in the biggest car market in the world climbed 12.8% in December compared to the same month the previous year, reaching a record high of 83,000 vehicles.

According to sales data, China is Tesla’s second-largest market, and 36.7% of its vehicles were delivered there in 2024.

But with shipments from China declining by 24%, its worldwide deliveries fell 1.1%, missing CEO Elon Musk’s earlier forecast of modest growth.

Sales were negatively impacted by reduced European subsidies, a shift in the United States toward cheaper hybrid cars, and more fierce international competition, particularly from China’s BYD (002594.SZ), opens new tab.

According to figures released by the China Passenger Car Association (CPCA) on Friday, Tesla’s sales of electric vehicles (EVs) built in China, including exports to Europe and other countries, decreased by 0.4% year over year to 93,766 units in December. This marked the company’s first yearly drop in deliveries from its Shanghai facility.

Including both domestic and export sales, full-year sales of Model 3 and Model Y automobiles built in China fell 3.3%. Based on data from CPCA and Tesla, Reuters calculated that China’s exports fell to roughly 260,000 last year, the lowest level since 2021.

The EU’s European Commission initiated a year-long subsidy inquiry against Chinese-made EVs in October, imposing a 7.8% tariff on Chinese-made Tesla vehicles, overshadowing the U.S. EV manufacturer’s shipments to Europe from its most productive factory.

On September 2, 2023, at the China International Fair for Trade in Services (CIFTIS) in Beijing, China, a staff member is seated inside Tesla’s new Model 3 automobile. Licencing Rights for REUTERS/Florence Lo/File Photo Purchase.

According to John Zeng, head of market forecast for China at London-based consultancy GlobalData, the automaker’s record sales in China while its deliveries worldwide declined are indicative of the global EV landscape because China is the only significant market experiencing robust growth as opposed to a slowdown or even a slide in other markets.

According to industry data, China accounted for 70% of global EV and hybrid sales in the first 11 months of 2024 and was responsible for more than 90% of the rise in global EV and hybrid sales over the previous year.

Tesla was still only ahead of BYD, whose EV sales increased 12.1% to 1.76 million worldwide, with full-year global sales of 1.79 million vehicles.

Due to weak demand and increased competition from Chinese EV manufacturers, the U.S. EV behemoth reduced the number of its China sales team and its global personnel last year.

Tesla has extended zero-interest financing of up to five years for some Model 3 and Model Y cars until the end of this month, as well as a 10,000 yuan ($1,369.99) discount on outstanding loans for its best-selling Model Y, as the third year of an EV price war in China approaches.

BYD exceeded its sales goal last year, with passenger car sales jumping 41% to over 4.25 million units. BYD has been at the forefront of a cost-cutting race with its Dynasty and Ocean series of EVs and plug-in hybrids.

Due to an additional 17% tariff, the lowest the EU has imposed on Chinese EVs from China, the Chinese EV champion’s exports overseas increased 71.9% to 417,204 units, or 9.8% of its global sales, falling short of its export goal of 450,000 units for 2024.

In Brazil, where Brazilian authorities are looking into the working conditions of Chinese laborers at the building site of a local BYD factory, BYD and its contractor Jinjiang Group sold almost one out of every five cars made in China.