
Explained: Why Are Tesla Sales Declining Globally?
- by Times Now
- May 23, 2025
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Updated May 23, 2025, 12:07 IST
One of the biggest reasons for Tesla's sales slump is increasing competition, especially from Chinese EV manufacturers like BYD. (Credits: Upper Allen Fire Department)
For years, Tesla was the undisputed leader of the electric vehicle (EV) revolution, riding high on innovation, brand appeal, and first-mover advantage. But in a surprising twist, the company's global sales have started to dip, a rare occurrence for a brand that hasn't seen an annual decline since 2011. In 2024, Tesla delivered around 1.79 million vehicles worldwide, which was a 1.1% drop from the previous year. In the first three months of this year, U.S. sales plunged 13%, the largest drop observed in the last three years. This decline, while not catastrophic, has raised questions about what's going wrong. Let's break it down. Stiff Competition From Global Players
One of the biggest reasons for Tesla's sales slump is increasing competition, especially from Chinese EV manufacturers like BYD. Once seen as a challenger, BYD is now outselling Tesla in some key markets. In April 2025, BYD sold more electric vehicles in Europe than Tesla for the first time ever. This marks a significant shift in consumer preference and highlights how Tesla is losing ground, particularly outside its stronghold markets.
Chinese automakers are aggressively expanding with a wide range of affordable, well-equipped EVs. These vehicles often offer better value for money, especially in price-sensitive regions. As a result, Tesla's relatively higher-priced models are no longer the obvious choice for many buyers.
Trouble in Europe, Gains in China
Europe, which was once a growing market for Tesla, has seen a major drop. In January 2025, Tesla's European sales fell by a staggering 45% compared to the same period the previous year. Its market share also dipped from 1.8% to just 1%. This decline is partly due to Tesla's ageing lineup and also changing consumer sentiment.
Interestingly, China has been a bright spot. In 2024, Tesla sold over 657,000 vehicles in the country, marking an 8.8% increase. This shows that while global numbers are falling, Tesla still holds strong appeal in certain markets, largely thanks to its Shanghai Gigafactory and localised strategy.
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