Tesla delivered a record number of electric vehicles in the fourth quarter, exceeding market expectations and surpassing its 2023 target, but fell behind China’s BYD as the leading EV manufacturer.
Tesla delivered 494,989 electric vehicles from October to December, falling short of the 526,409 vehicles delivered by Warren Buffett-backed BYD – largely in China – indicating that auto customers were looking for cheaper models in a high-interest-rate economy.
While the automaker’s year-end sales drive paid off for the most part, with 1.8 million vehicles delivered this year, it fell short of CEO Elon Musk’s ambitious 2 million annual internal objective.
However, it is still ahead of BYD for the whole year. The Chinese firm delivered a total of 3.02 million vehicles, including about 1.4 million plug-in hybrid EVs.
Tesla stock, which doubled last year, was nearly flat on Tuesday in a broadly weaker market.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said, “BYD’s deliveries show price cuts are working for the Chinese company. The fight will hurt margins for both companies, but BYD clearly believes it’s a price worth paying to increase market share and recognition.”
In an effort to promote sales before some models of Tesla’s compact Model 3 sedan lost U.S. federal tax credits in 2024, Tesla raised prices and provided incentives such as six months of free fast charging if consumers took delivery by December 31.
This contributed to an 11% increase over the previous quarter and a higher-than-expected 473,253 figure, according to 14 analysts polled by LSEG. After a production stop in the third quarter to modernize assembly lines, it produced a record 494,989 vehicles in the fourth quarter, bringing total output in 2023 to 1.85 million units.
Gary Bradshaw, portfolio manager at Tesla shareholder Hodges Capital, said, “Much, much, much better than domestic U.S. car companies.”
Rivian, a smaller rival, also announced deliveries on Tuesday, falling short of market expectations amid a broader drop in EV demand.
Because of the weakening, U.S. automakers such as Ford and General Motors have been more cautious about their EV manufacturing capacity plans.
Tesla is also under regulatory scrutiny for its self-driving technology, with the firm recalling over 2 million vehicles last month to install new protections in its Autopilot advanced driver-assistance system after a federal safety regulator raised safety concerns.
Consumer Reports an influential U.S. non-profit group that conducts extensive reviews of cars, kitchen appliances and other goods said its preliminary evaluation suggests the software update to fix issues were not sufficient and did not go far enough to prevent misuse and driver inattention.
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