Tesla Sees Record Year in China Despite First Global Sales Slump

US carmaker Tesla sold a record number of electric vehicles in China last year, even as its annual global deliveries declined for the first time.

Tesla said its sales in China rose 8.8% to a record high of more than 657,000 cars in 2024.

China remained Tesla’s second-largest market after the United States, with the carmaker delivering 36.7% of all its cars to customers in the country.

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The sales bump in China came at a time when Tesla reported its first fall in yearly deliveries. The Elon Musk-led carmaker sold a total 1.79 million EVs through 2024, which was 1.1% lower than the prior year.

Musk had earlier predicted “slight growth” in 2024 deliveries and offered a range of promotions including interest-free financing and free fast-charging to boost sales.

But reduced European subsidies, a shift in consumer interest in the United States toward lower-priced hybrid vehicles and tougher competition especially from China’s BYD hurt Tesla.

Analysts also pointed to Tesla’s aging lineup for the sales decline.

The slump “highlights that the current vehicle lineup is nearing market saturation,” Morningstar analyst Seth Goldstein said in a note.

The new Cybertruck pickup is also adding to Tesla’s woes, failing to lure customers wary of high borrowing costs.

Tesla shares in the US closed more than 6% lower on Thursday, coming off a strong 2024, in which they rose more than 60% after Trump’s election win with strong support from Musk.

China, the EV outlier

Experts say Tesla’s record sales in China, despite the fall in its worldwide deliveries, are reflective of the global EV landscape.

China is the only major market seeing robust growth versus a slowdown or even slide in other markets, John Zeng, head of market forecast for China at London-based consultancy GlobalData, said.

China accounted for 70% of global sales of EVs and hybrids in the first 11 months of 2024. Furthermore, more than 90% of an increase in global EV and hybrid sales over last year came from China, industry data showed.

Meanwhile, China’s EV market — the world’s largest — is on track for another competitive year in 2025.

Tesla, BYD and two more Chinese EV-makers will continue their sales incentives in the country, extending a brutal, ongoing price war for a third year.

The incentives include a 10,000 yuan ($1,369.99) discount on outstanding loans from Tesla for its best-selling Model Y car. It is also offering zero-interest financing of up to five years for some Model 3 and Model Y cars until the end of this month.

BYD inching close

Despite those incentives, however, Tesla is still close to losing its top global EV-seller crown to Chinese rival BYD.

With full-year global sales of 1.79 million cars, Tesla was only narrowly ahead of BYD, which saw EV sales grow 12.1% to 1.76 million globally.

Unlike Tesla, BYD overshot its sales target in China, with passenger vehicle sales up 41% to over 4.25 million units last year.

The Chinese EV champion has led a cost-cutting competition with its Dynasty and Ocean series of EVs and plug-in hybrids.

The lower-priced EVs and hybrids also fuelled a 71.9% rise in BYD’s overseas shipments, which rose to 417,204 units. That was 9.8% of BYD’s global sales.

The carmaker missed its export target of 450,000 for 2024, however, as it faces a 17% additional tariff in the European Union, one of its biggest foreign markets.

Nearly one out of five BYD cars sold out of China was in Brazil, where the carmaker is now facing investigations over “slavery-like working conditions” and “forced labour” at the construction site of its factory.

The factory site, currently closed down, was to be BYD’s first factory outside of Asia.

Reuters, with additional editing by Vishakha Saxena

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]