In December, Tesla's sales in the largest automotive market surged by 12.8% compared to the previous month, totaling a record 83,000 units, as reported by Tesla China.
For the year 2024, Tesla delivered 36.7% of its vehicles to customers in China, which is its second-largest market based on sales data.
Despite this success in China, Tesla's global deliveries fell by 1.1%, falling short of CEO Elon Musk's earlier expectations for modest growth. Exports from China also saw a significant decline of 24%. Factors contributing to this downturn include reduced subsidies in Europe, a shift in the U.S. market towards more affordable hybrid vehicles, and intensified competition from companies like BYD in China.
In December, sales of Tesla's China-manufactured electric vehicles, including exports to Europe and other regions, decreased by 0.4% year-over-year, totaling 93,766 units, according to the China Passenger Car Association (CPCA). This decline marked the first annual drop in deliveries from Tesla's Shanghai facility.
For the full year, sales of the China-made Model 3 and Model Y, encompassing both domestic sales and exports, fell by 3.3%. Exports from China plummeted to approximately 260,000 units last year, representing the lowest performance since 2021, based on calculations from Reuters using Tesla and CPCA data.
The company's exports to Europe from its most productive factory were impacted by an ongoing subsidy investigation into China-made electric vehicles initiated by the EU's European Commission, which imposed a 7.8% tariff on Tesla cars from China in October.
John Zeng, head of market forecasting for China at the London-based consultancy GlobalData, noted that Tesla's record sales in China, juxtaposed with a decline in global deliveries, highlight the contrasting dynamics of the global electric vehicle market, where China remains the only major region experiencing significant growth amidst downturns in other areas.
China represented 70% of the worldwide sales of electric vehicles (EVs) and hybrids during the first 11 months of 2024, with over 90% of the increase in global EV and hybrid sales compared to the previous year originating from China, according to industry data.
Tesla maintained a slight lead over BYD in total global sales, achieving 1.79 million cars sold for the full year, while BYD's EV sales rose by 12.1% to reach 1.76 million units worldwide.
In response to sluggish demand and intensified competition from Chinese manufacturers, Tesla reduced its global workforce last year and scaled back its sales team in China.
As the price competition in China's EV market enters its third year, Tesla has implemented a discount of 10,000 yuan ($1,369.99) on outstanding loans for its popular Model Y, along with offering zero-interest financing for up to five years on select Model 3 and Model Y vehicles until the end of this month.
BYD, which has been at the forefront of a cost-reduction strategy with its Dynasty and Ocean series of EVs and plug-in hybrids, exceeded its sales goals, with passenger vehicle sales increasing by 41% to over 4.25 million units last year.
The Chinese EV leader's international shipments surged by 71.9% to 417,204 units, accounting for 9.8% of its total sales, although it fell short of its export target of 450,000 for 2024 due to a 17% additional tariff, the lowest imposed by the EU on Chinese EVs.
Almost 20% of BYD's cars sold outside of China were delivered to Brazil, where both BYD and its contractor Jinjiang Group are under investigation by Brazilian authorities regarding the working conditions of Chinese laborers at a local BYD factory construction site.