Tesla's sales decline while electric cars from China take off

Tesla sold 1.79 million vehicles to customers last year, a slight decrease compared to the 1.8 million vehicles in the previous year. Production also weakened slightly at 1.77 million vehicles. Even the eagerly awaited Cybertruck, Tesla's futuristic pick-up truck, did not achieve its hoped-for sales figures. Together with the Model S and Model X, the Cybertruck made up less than 5% of total sales. Models 3 and Y remain Tesla's strongest guarantors of success, accounting for the lion's share of sales.

Tesla's sales problems are not an isolated case, as almost the entire electric car market continues to lose momentum. Global challenges such as persistent inflation, rising interest rates and ongoing supply chain issues are dampening consumer interest. Added to this are changes to subsidy conditions in some countries, further hampering electric car sales.

While Tesla is struggling with headwinds, BYD is riding a wave of success. The Chinese manufacturer sold an impressive 4.27 million vehicles in 2024 compared to 3 million of the previous year. A key factor in this success is the growing popularity of plug-in hybrids in China: BYD was able to sell 2,485,378 of these vehicles in 2024 alone, benefiting from generous government subsidies.

German auto giant Volkswagen (VW), on the other hand, is in trouble. VW estimates that it sold 9 million vehicles in 2024, 200,000 fewer than in 2023. In addition to the current challenges facing the wider electric car market, Volkswagen is struggling with high production costs in Germany, comparatively low productivity and strong dependence on the Chinese market. In China in particular, Volkswagen suffered a significant drop in sales due to aggressive competition from domestic manufacturers such as BYD.

To make matters worse, Volkswagen has also had to deal with data protection issues. A security vulnerability was recently discovered at VW subsidiary Cariad, which is responsible for developing software solutions for VW's vehicles. Sensitive location data for around 800,000 VW, Audi, Seat and Skoda vehicles was freely accessible for months.

Meanwhile, another competitor for Western car manufacturers is on the rise. Xiaomi, known for its smartphones, entered the e-car market in 2024. Around 130,000 Xiaomi SU7 vehicles were sold to customers in the first year alone. The manufacturer intends to step up its game in 2025 and double its sales figures.