American automobile major, Tesla, reported its first annual sales decline on Thursday. This is the first time the company has reported a full-year drop in its sales since it went public. 

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Sales numbers

In the fourth quarter, Tesla sold 495,570 vehicles, a two per cent increase from the previous year. However, this figure fell short of the 595,413 EVs sold by Chinese EV manufacturer BYD during the same period.

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Tesla retained its position as the world’s largest EV maker in 2024, delivering 1.8 million vehicles—24,000 more than BYD's annual total.

Despite its leading position, Tesla's annual sales dropped 1 per cent compared to 2023. This marked a significant slowdown from its earlier growth, including a 37 per cent rise in 2023. The company previously reported annual sales growth rate at nearly 50 per cent.

Rising competition

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Tesla is currently facing rising competition from both Chinese automakers like BYD and traditional global players, including General Motors, Ford, Volkswagen, Hyundai, and Kia. 

While these legacy automakers remain focused on gasoline-powered vehicles, their increasing investments in EVs are putting pressure on Tesla.

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In response to declining demand, Tesla has reduced vehicle prices in key markets such as the United States and China. However, the company remains more profitable than its competitors, who are still incurring losses on their EV offerings as they scale production.

Overall EV sales continue to grow globally but at a slower rate than previous years.

Tesla shares fell by over 4 per cent following the weak sales report but ended 2024 up 68 per cent. Much of the gain occurred post-Election Day, as investors speculated on favourable policies under the incoming Trump administration, supported by Tesla CEO Elon Musk.

(With input from agencies)