Tesla (TSLA.O) shattered records in China in 2024, selling more than 657,000 vehicles—a remarkable 8.8% increase in a year when its global deliveries fell for the first time. This achievement underscores China’s dominance as the world’s largest and most dynamic EV market.
In December alone, Tesla delivered a record 83,000 vehicles in China, marking a 12.8% rise from the previous month. The company attributed 36.7% of its annual sales to Chinese customers, solidifying the region as its second-largest market. Yet globally, Tesla’s deliveries slipped by 1.1%, with exports from its Shanghai plant tumbling 24%.
The Challenges Behind the Numbers
Despite its China success, Tesla faced significant headwinds abroad. European subsidies for EVs waned, the U.S. market leaned towards hybrid vehicles, and Chinese automaker BYD (002594.SZ) tightened the competition globally. Adding to the pressure, a European Union investigation into subsidies for China-made EVs culminated in a 7.8% tariff on Tesla’s exports to Europe, further dampening its performance.
The Shanghai plant, Tesla’s crown jewel of productivity, reported its first annual decline in deliveries. Full-year sales of China-made Model 3 and Model Y cars fell by 3.3%, with exports shrinking to 260,000 units—Tesla’s lowest export tally since 2021.
The Global EV Landscape: China Leads the Charge
John Zeng of GlobalData highlighted the global disparity in EV adoption, noting that China remains a growth hotspot. “China accounted for 70% of global EV and hybrid sales in the first 11 months of 2024,” he said. “Over 90% of the global increase in EV sales this year came from China.”
Tesla narrowly retained its lead over BYD, delivering 1.79 million cars globally compared to BYD’s 1.76 million. However, BYD’s aggressive cost-cutting strategy and rapid overseas expansion have made it a formidable rival. The Chinese automaker sold over 4.25 million vehicles last year, with a 41% rise in passenger EV sales and a 71.9% increase in overseas shipments.
The Price War Intensifies
As China’s EV price war enters its third year, Tesla extended a 10,000 yuan ($1,369.99) discount on Model Y loans and introduced zero-interest financing for select Model 3 and Model Y cars. Meanwhile, BYD continues to dominate with its Dynasty and Ocean series, achieving robust growth despite facing challenges like Brazil’s labor investigations at its factory site.
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