Tesla, the world leader in electric vehicles, is experiencing a slowdown in its deliveries for the first time in 2024, an unprecedented situation since its creation. This decline, accompanied by challenges at its main production sites and increased competition, raises the question of its ability to maintain its dominant position in a booming market.
Mixed results for Tesla
Tesla recorded a 1% decline in its deliveries in 2024, a historic first for the company. According to figures released on January 2, 1.79 million vehicles were delivered over the year, a figure below analysts’ expectations. The cause is production difficulties marked by temporary factory closures in the United States, China and Germany. The latter was particularly impacted by an arson and a strike.
Despite incentive measures to stimulate demand, Tesla’s current range, considered aging, is struggling to appeal to ever more innovative competitors. The rise of brands like BYD, the Chinese manufacturer which now competes in terms of sales volume, is increasing this pressure.
However, all is not gloomy for Tesla. The manufacturer delivered 495,570 vehicles in the fourth quarter, a quarterly record which demonstrates its resilience. Analysts at Wedbush Securities remain optimistic and forecast a significant rebound in 2025, with shipment estimates reaching 2.07 million units, an increase of nearly 17%.
What future for Tesla?
Faced with Tesla’s slight slowdown, BYD continues its impressive momentum. In 2024, the Chinese manufacturer will sell more than 4.2 million vehicles, all categories combined, recording an increase of 41% compared to the previous year. This performance is largely based on generous subsidies from the Chinese government and a strong presence in its domestic market, where 88% of BYD’s sales in December were made.
However, the Chinese giant encounters obstacles internationally. Tariffs targeting Chinese electric vehicles have intensified, slowing its global expansion. Also note that the majority of BYD’s sales concern plug-in hybrids, a different segment from that of 100% electric vehicles dominated by Tesla.
If Tesla maintains its status as the world’s leading maker of all-electric vehicles, fierce competition and rapid market change could redefine that balance. With optimistic forecasts for 2025, the Texan company must now take up the challenge of renewing its range and optimizing its production capacities to meet rapidly changing global demand. As for BYD, its meteoric rise is a reminder that the battle for supremacy in the auto industry is only just beginning.
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