After being the surprise of 2023, Tesla faces the challenge this year of a decline in sales of electric cars and strong competition from BYD
Ten years ago it would have been impossible to even imagine that the reference that the global automotive industry would use to evaluate the evolution of the market would be Tesla. However, since the North American SUV Tesla Model Y became the best-selling model in the world in 2023, it is inevitable that all eyes will fall on Elon Musk’s electric car brand to take it as a parameter.
For several months now, the automotive world has been noticing through different indicators that the sale of 100% electric vehicles is slowing down. It continues to grow, it is true, but not at the same rate as it did in the last two years. Now, with the publication of Tesla’s global sales numbers referring to the first quarter of 2024, there may possibly be a much more appreciable and tangible sample, precisely because it is global and not tied to a seasonal or geopolitical variable like the previous ones. The fall is not from Tesla, but from electric mobility in general.
The fact is that between January and March 2024, the North American brand produced 433,371 units among all its models, although mainly Model 3 and Model Y. However, deliveries were 386,810, which left a remainder of 46,561 cars stopped on the beaches. of its five factories distributed in the United States, Germany, and China.
But this data would not represent a shrinking trend in the electric car market, without the comparison with the only brand that overshadowed Tesla last year, the Chinese BYD, which had even surpassed them in the fourth quarter of 2023 with 526,400 against 484,500 of Musk’s. In the first quarter of 2024, BYD recorded 300,114 global sales, which is 22% less than Tesla. The comparison with the first quarter of 2023 is not valid for the Chinese, because their global expansion was still incipient, which gives them a positive 13% even with 300,000 current units. However, Tesla fell 8% compared to the January to March 2023 numbers.
These days, the Car Industry Analysis report was also published, in which the difference in global sales volume of electric cars in the total number of vehicles of all technologies can be clearly seen. In that table, Toyota was the brand that delivered the most cars to customers around the world in 2023 with 9,483,137 units, followed by Volkswagen with 5,276,200, Ford and its 4,246,000, Hyundai with 3,993,179 and Honda with 3,854,000 cars.
The Chinese BYD, which in addition to electric vehicles has a wide range of hybrids and plug-in hybrids, entered the Top 10 by placing ninth with 2,885,066, while Tesla, which as is known only manufactures 100% electric cars, closed 2023 with 1,808,581 cars and occupies 15th absolute place.
There are some explanations that have been tested for Tesla’s decline, although none seem solid enough, and they will have to be confirmed over the course of the year with the partial measurements of quarters to come. The redesign of the Model 3, already launched in Europe and imminent in the United States, is one of them, and perhaps the one that makes the most sense, since when purchasing a new car, it is normal for the date to be delayed until the vehicle is available. updated version to come. The other two reasons were the conflict in the Red Sea and the consequent blockage of the Suez Canal, and a fire at the Berlin Gigafactory, but both seem to have a minor impact on the delivery of units.
What is happening is that more countries have begun the process of withdrawing aid or subsidies for electric cars, which was one of the most valuable tools to promote the change from thermal cars to battery-powered cars. Germany was one of the most significant for its influence in the purchase of this technology and was one of those that already began the withdrawal of this aid to consumers.
At the same time, the price of electric cars continues to be high for average pockets. This means that after two perfectly identifiable moments for the sale of this type of vehicle, such as the initial emergence of the technology first and the one that generated the push from governments later, a point has now been reached in which sales they slow down progressively. This occurs partly because of the price, but also because interest rates are not as low as a year ago in many developed countries.
For many analysts, this does not seem to be a Tesla problem, but perhaps a problem that affects them more than other manufacturers in the world, because Elon Musk’s bet is 100% on total electrification and not on other technologies such as that of hybrid cars. The last time Tesla sales fell was in the second quarter of 2020 when the global COVID-19 scenario forced factories to close. Until that moment and after, Tesla always improved its figures compared to the previous year. Thus, what could be its great banner as the pioneer and main manufacturer of electric cars may also be its worst quality in the future scenario.
Tesla is betting heavily on its affordable model of less than $25,000, which will begin to be tested this year and will begin to be sold in 2025. It was precisely Musk himself who this year announced that its next wave of growth will not arrive until the end of 2025, thanks to this low-cost new car project.