Electric vehicle (EV) giant Tesla Inc. (NASDAQ: $TSLA) exceeded Wall Street estimates in the fourth quarter, delivering 484,507 vehicles to customers. This brought total deliveries for 2023 to 1.81 million, up 38% from the previous year. While the growth rate slowed from 2021’s 50% pace, Tesla still leads the fast-growing global EV market. However, competition is heating up, especially from Chinese manufacturers like BYD.
Analysts surveyed by Bloomberg had projected 483,000 deliveries in Q4. Tesla beat those estimates, likely aided by increased output at its new factories in Austin and Berlin. The company produced 495,000 EVs in the quarter, also topping estimates. Model 3 and Model Y vehicles again made up the bulk of sales.
For the full year, deliveries hit 1.81 million, making Tesla the first automaker ever to sell over 1.8 million EVs. Production tallied 1.85 million vehicles as the company continued prioritizing growth over profitability.
“Tesla exceeded targets despite economic headwinds,” said analyst Alex Potter of Piper Sandler. “The results highlight the company’s unmatched scale in EV production.”
BYD Challenges Tesla’s Global Dominance
However, Tesla is seeing intensifying competition, especially in China which is the world’s largest EV market. Upstart BYD delivered over 526,000 pure-electric vehicles in Q4 and topped Tesla with 1.86 million EV deliveries for the full year.
BYD vehicles are now sold in over 70 countries, expanding rapidly in Europe, Latin America, and Southeast Asia. The company has quickly risen from a battery maker to the second-largest global EV manufacturer.
“BYD is eating into Tesla’s growth,” warned Pras Subramanian, autos reporter at Yahoo Finance. “There’s going to be a lot of pressure on Tesla to maintain market share as China powers ahead.”
Beijing heavily supports its domestic EV industry through subsidies and favorable policies. Chinese automakers like BYD, Nio, and Xpeng are using this home-field advantage to turn China into the epicenter of electrification.
Last year, China sold over 10 million EVs, more than triple the volumes seen in Europe and North America combined. Experts predict over half of all passenger EVs will be sold in China by 2025.
Outlook For 2024
While missing its long-term 50% annual growth target, Tesla still leads the industry in the production and sale of EVs globally. CEO Elon Musk predicted 50% growth again in 2024, which would require nearly 2.7 million deliveries.
With new factories ramping up output and model refreshes stimulating demand, Tesla appears primed for another year of strong growth. However, Chinese rivals like BYD have their sights set on the EV crown, backed by Beijing’s industrial policies.
The EV race is accelerating rapidly, and 2024 promises to bring even fiercer competition. For now, Tesla remains in the pole position, but its lead seems tenuous. Maintaining market leadership will require flawless execution as the challengers close in.
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