Chinese automaker BYD has posted a remarkable 58% increase in vehicle sales for the first quarter of 2024, sharply contrasting Tesla’s ongoing decline in demand across key European markets, Financial Times reports.
BYD announced on Tuesday that it delivered 986,098 passenger vehicles in the first three months of the year, with 416,388 of those being pure electric vehicles (EVs), reflecting a 39% year-on-year rise. The company’s strong start to the year follows its recent milestone of surpassing $100 billion in annual sales, driven by a surge in demand for hybrid vehicles in China.
Meanwhile, Tesla is bracing for a significant drop in first-quarter deliveries, with analysts warning of a potential decline exceeding 10%. Sales in France and Sweden suffered particularly steep falls in March, despite the highly anticipated upgrade to Tesla’s best-selling Model Y.
In France, Tesla registrations plummeted by 37% year-on-year in March, totaling 3,157 vehicles, while Sweden saw an even sharper decline of 64%, with only 911 cars registered. The drop continues a broader trend of weakened European demand for Tesla since the beginning of 2024. However, Norway offered a rare bright spot, where the refreshed Model Y reclaimed its position as the country’s best-selling car, with sales stabilizing after a drastic 48% drop in February.
Analysts have been downgrading Tesla’s first-quarter delivery forecasts, with Deutsche Bank cutting its estimate to 345,000 vehicles, an 11% year-on-year decline, while RBC Capital Markets expects a slightly better outcome at 364,000 units.
Beyond the numbers, industry observers believe Tesla’s struggles in Europe may stem from more than just an aging product lineup. “Our sense is there is some level of brand damage happening in western Europe and pockets within the US or Canada caused by Elon Musk’s political activities, in turn hurting demand,” wrote Deutsche Bank analyst Edison Yu in a note.
Tesla dealerships and vehicles have also become targets of protests in both the US and Europe following Musk’s controversial interventions in European politics and his growing influence at the White House.
While Tesla remains well-positioned to withstand Donald Trump’s trade war due to its strong US manufacturing presence, the company still faces potential risks. It has warned that retaliatory tariffs could impact its operations by increasing the cost of manufacturing in the US, given its reliance on certain imported components.
As BYD continues to expand its global footprint and demand for Tesla vehicles falters in Europe, the battle for EV market dominance is heating up, with Chinese automakers gaining ground at an accelerating pace.
