Tesla is celebrating a record-breaking year in China, even as its global sales declined for the first time in 2024. The U.S. electric vehicle (EV) giant saw an 8.8% increase in China sales, delivering more than 657,000 cars, while its worldwide deliveries fell by 1.1%. This highlights China’s dominance in the EV market, even as other regions face slowing demand.
Tesla’s Strongest Market in 2024
China, the world’s largest auto market, accounted for 36.7% of Tesla’s total sales, making it the company’s second-largest market. In December alone, Tesla delivered 83,000 cars in China—a 12.8% increase from November, setting a new monthly record.
However, Tesla’s exports from its Shanghai factory dropped by 24%, contributing to the company’s first-ever decline in global deliveries. The primary reasons include:
- Reduced government subsidies in Europe
- A shift toward hybrid vehicles in the U.S.
- Intense competition from Chinese EV makers like BYD
Why Is China the Exception?
Tesla’s strong performance in China follows a broader global trend where the country remains the only major market seeing consistent EV growth. According to industry data, China made up 70% of all global EV and hybrid sales in the first 11 months of 2024 and accounted for over 90% of global EV sales growth.
However, Tesla isn’t leading the EV market alone. Chinese automaker BYD saw a 12.1% increase in EV sales, reaching 1.76 million units globally, just behind Tesla’s 1.79 million sales. BYD’s passenger vehicle sales rose 41%, while its international shipments grew by 71.9%, expanding aggressively into markets like Brazil and Europe.
Tesla’s China Strategy: Discounts & Incentives
Facing stiff competition, Tesla has extended its discount strategy in China to maintain its growth. It now offers:
- A 10,000 yuan ($1,370) discount on outstanding loans for Model Y buyers
- Zero-interest financing for up to five years on select Model 3 and Model Y vehicles
This move comes as the China EV price war enters its third year, with BYD aggressively cutting costs on its Dynasty and Ocean series.
Tesla’s Challenges & The Road Ahead
Despite its success in China, Tesla still faces major hurdles:
- EU tariffs: The European Commission imposed a 7.8% tariff on China-made Teslas due to a subsidy investigation.
- Workforce reductions: Tesla downsized its global workforce and cut the size of its China sales team due to slowing demand.
- BYD’s rapid growth: BYD is pushing hard to surpass Tesla, expanding exports despite facing a 17% EU tariff.
With China leading the global EV transition, Tesla must continue cutting prices and innovating to keep up with local brands. Will its aggressive China strategy be enough to stay ahead of BYD?
