Tesla’s performance in China reached new heights in 2024, with sales climbing 8.8% to surpass 657,000 vehicles, marking a record-breaking year in the world’s largest auto market. This growth came despite the company experiencing its first annual global delivery decline, down by 1.1%.
China as Tesla’s Growth Engine
China accounted for 36.7% of Tesla’s total deliveries in 2024, solidifying its position as the automaker’s second-largest market. In December alone, Tesla China achieved record monthly sales of 83,000 units, a 12.8% increase from November.
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John Zeng, market forecast head at GlobalData, noted that Tesla’s success in China underscores the country’s pivotal role in the global EV market. “China is the only major market showing consistent EV growth, while other regions face stagnation or decline,” he explained.
Indeed, 70% of global EV and hybrid sales in the first 11 months of 2024 came from China, contributing to over 90% of the worldwide growth in the sector during that period.
Global Challenges for Tesla
While China thrived, Tesla faced significant headwinds in other markets:
- Reduced subsidies in Europe hampered demand.
- A U.S. shift toward more affordable hybrid models diverted buyers.
- Increasing competition from Chinese automakers, notably BYD, weighed on global sales.
Despite these challenges, Tesla managed 1.79 million global deliveries, narrowly maintaining its lead over BYD, which sold 1.76 million EVs globally, marking a 12.1% growth.
China’s Competitive EV Market
China’s ongoing EV price war, now entering its third year, has driven Tesla to implement aggressive promotional strategies. The automaker extended a 10,000 yuan ($1,370) discount on loans for its popular Model Y and offered zero-interest financing for some Model 3 and Model Y vehicles. These offers will continue through the end of January.
Meanwhile, BYD continues to dominate with its cost-effective Dynasty and Ocean series. The company exceeded expectations with 4.25 million passenger vehicle sales, a 41% increase from the previous year. However, BYD’s overseas growth faced hurdles, including a 17% EU tariff and investigations in Brazil regarding the treatment of Chinese workers at a factory construction site.
Tesla and BYD in Global EV Leadership
Tesla and BYD remain locked in a fierce battle for EV market dominance. Tesla’s ability to harness China’s surging demand while grappling with global challenges demonstrates its strategic reliance on the Chinese market. However, as competition intensifies and global dynamics shift, Tesla’s adaptability will be key to sustaining its leadership position.
For 2025, all eyes will be on Tesla’s ability to leverage its Chinese success while addressing weaknesses in other regions.
