Tesla regains top EV spot from BYD, despite big sales miss and first fall since 2012

Tesla has regained its position as the world’s top selling electric vehicle company, at least briefly, after outselling Chinese competitor BYD in the first quarter of 2024 and despite a big miss in sales expectations and its first fall in year on year sales since 2012.

Tesla on Tuesday (US time), reported a nine per cent  fall in sales in the first quarter of 2024, compared to the same period last year, with delivery numbers  for the quarter coming in 13% below consensus estimates.

Morgan Stanley automotive analyst Adam Jonas said it was the first year on year decline in quarterly sales since 2012, apart from sales shock from Covid in the second quarter of 2020. He said the data points to a potential 14 per cent fall in sales for the 2024 calendar year to just 1.55 million units.

Jonas also noted that the Q1 report shows production exceeding deliveries by 46,600 units, which indicates that inventory has increased by 9 days to 24 days.

“If not a record high, this represents a multi-year high in global days supply for Tesla” says Jonas.

Since it was founded Tesla has generally been production constrained rather than demand constrained with sales growth only limited by the speed at which the company could add factory capacity.

However, the discrepancy between Q1 production and delivery numbers has some analysts questioning if for the first time Tesla demand is dropping below supply.

In its Q1 press release Tesla says delays caused by the refreshed Model 3 design and geopolitical issues were the main drivers of the drop in numbers.

“Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory, and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin,” it said in its press release.

Tesla regains global EV sales spot despite poor sales

In Q4 2023, Chinese car maker BYD’s total battery electric vehicle (BEV) sales surpassed Tesla for the first time. Despite its fall in sales, Tesla has now returned to the top spot in Q1 2024, traditionally a slow quarter for car sales in China due to Chinese New Year celebrations.

Still, the Tesla share price dropped significantly, down 7 per cent as total deliveries were well short of expectations, taking its total losses for the 2024 calendar year to 33 per cent. The share price has fallen to $US166, well below its record high of $US407 (adjusted for share splits) in late 2021.

Over the three months Tesla produced over 433,000 vehicles and delivered approximately 387,000 vehicles. Over the same period BYD sold just over 300,000 BEVs.

EV market share growing in China despite top 2 slow down

Despite lower than expected Q1 sales from the world’s top two EV makers, plug-in market share continues to boom in China. Last month the CEO of BYD Wang Chuanfu forecast that China would cross the 50% threshold sometime this year but has now now brought forward his prediction saying it will likely happen during the next 90 days.

“The penetration rate of NEVs crossed 48.2 per cent last week, and if it continues at this rate, I estimate that the penetration could cross 50 percent in the next three months,” Wang Chuanfu said in a recent speech at the China EV 100 Forum in Beijing.