In a surprising turn of events, Tesla, the renowned US car manufacturer led by billionaire Elon Musk, has relinquished its position as the top seller of all-electric vehicles to the Chinese company BYD.

 

Despite achieving a record delivery of 484,507 vehicles in the fourth quarter of 2023, marking an impressive 11 percent increase, Tesla fell short as BYD reported a remarkable 526,409 sales for the same period, capitalizing on strong government support in Beijing for the electric vehicle (EV) sector.

 

Not only did Tesla deliver fewer vehicles, but it also trailed BYD in overall vehicle production during the fourth quarter. This development underscores the challenges Tesla is likely to face in the upcoming year, with competitors eager to tap into the surging demand for EVs.

 

Following the announcement, Tesla’s stock experienced a temporary dip, recovering later to finish relatively flat.

 

BYD, which originated as a battery manufacturer in 1995 and later diversified into producing plug-in hybrid and all-electric vehicles, competes with Tesla on pricing in both the Chinese and European markets.

 

The company benefits from a structural advantage rooted in robust government support for electric vehicles in China, boosting domestic demand and strengthening its position in the export market, according to GlobalData Managing Director Neil Saunders.

 

While BYD triumphed in pure electric sales, it also excelled in plug-in hybrid electric vehicles, selling over 400,000 units in the fourth quarter and surpassing three million passenger vehicle sales in total last year.

Despite Tesla losing its quarterly sales crown, it maintained its dominance on an annual basis, delivering over 1.8 million EVs to customers in the year ending December, a notable 38 percent increase.

 

 

Garrett Nelson, an equity analyst at CFRA Research, remains optimistic about Tesla’s future in 2024. He cites the “plummeting” cost of electric batteries and foresees a boost in sales with the introduction of Tesla’s long-promised mass-market EV model later in the year.

 

Chinese automaker BYD reported selling more than 526,000 fully electric vehicles in the fourth quarter, potentially overtaking Tesla as the world’s top EV seller. Tesla is expected to report sales figures today. pic.twitter.com/GyIAZubvZN

— 1440 Daily Digest (@Join1440) January 2, 2024

Nelson also anticipates benefits for Tesla arising from the “increasing distress among upstart EV companies and traditional automakers pulling back somewhat on their prior EV growth plans.”