Tesla posted record China sales in 2024. But this year is going to be tough as competition heats up
Tesla models Y and 3 are displayed at a Tesla dealership in Corte Madera, California, on Dec. 20, 2024.
Justin Sullivan | Getty Images
Electric vehicle-maker Tesla’s sales in China climbed to a record high last year. Sustaining that performance in 2025 could prove tricky as competition with homegrown players intensifies, analysts said.
The U.S. electric vehicle maker saw annual sales in China jump 8.8% to a record high of more than 657,000 cars in 2024. In December alone, its sales rose 12.8% from the previous month to 83,000 units, according to Tesla China.
However, Tesla has been losing market share to Chinese new-energy-vehicle players, down from 7.8% in 2023 to 6% in the January to November period last year, according to Bill Russo, founder and CEO of Automobility, who believes Tesla is “struggling to keep pace [with domestic rivals] and has a limited and aging product portfolio.”
Brand resiliency and price cuts have supported Tesla’s sales so far, said Tu Le, founder and managing director of Sino Auto Insights, but he was less certain that Tesla could keep up its momentum in 2025, given the lack of new products and increased local competition, especially from Chinese companies.
Aggressive price war
Tesla slashed the price for its best-selling Model Y in China by 10,000 yuan ($1,364.5) in late December and extended a zero-interest five-year loan plan for car buyers until the end of January.
Its best-selling Model Y now starts at 239,900 yuan after the discount, while the Model 3 sedan starts at 231,900 yuan — Tesla had cut its prices by 14,000 yuan in April — according to its website.
Still that marked a significant premium over a swath of cheaper models offered by Chinese domestic carmakers. BYD, which dominated the market with around 34% market share, prices one of its best-selling models Seagull at 136,800 yuan, and the more affordable Yuan Plus model, starting at 96,800 yuan.
TOPSHOT – People look at a BYD Seagull car by Chinese electric vehicle (EV) manufacturer BYD Auto at the Bangkok International Motor Show in Nonthaburi on March 27, 2024. (Photo by Lillian SUWANRUMPHA / AFP) (Photo by LILLIAN SUWANRUMPHA/AFP via Getty Images)
Lillian Suwanrumpha | Afp | Getty Images
As the price war extends into the new year, Li Auto introduced cash subsidies of 15,000 yuan per purchase along with a three-year zero-interest financing scheme, according to a post last Thursday on its social media Weibo account. Nio also extended a similar three-year zero-interest loan plan for its EV buyers.
The purchasing incentives came on top of Chinese authorities’ push to extend the consumer goods trade-in program, which subsidizes consumers to trade in old cars or appliances and buy new ones at a discount.
The government-subsidized trade-in program could further lower prices for both Model 3 and Model Y by up to 50,000 yuan, Tesla China said.
“Tesla has to discount aggressively to keep pace with the ongoing price war in the market,” Russo noted.
Despite dwindling market share, Tesla is unlikely to lose its ground completely in China, according to Joe McCabe, CEO and president of AutoForecast Solutions, who compared Tesla as “the Apple of cars” — an “early adopter” in the EV space with “phenomenal” technology.
“I don’t think Tesla is at risk of not surviving,” McCabe added, “all [Elon Musk] has to do is drop the price by 5%, because he can, and that will help for little blips.”
Head-to-head race
In addition to lowering prices, Chinese electric carmakers have rolled out a slew of new models, many with fancy in-car features, such as projectors, embedded refrigerators and driver-assist systems.
Meanwhile Tesla has been slow in adopting any of these features, with its product portfolio focused solely on fully electric vehicles, while its homegrown rivals have steered into plug-in hybrid cars and extended-range EV categories.
These more traditional models appeal to buyers who are “still worried about the leap to fully electric [cars],” Sam Fiorani, vice president of AutoForecast Solutions said. “Tesla has no plans for anything other than fully electric vehicles.”
The automaker’s plans of launching its full self-driving supervised system still hinges on regulatory permission in China, while several local competitors have made the advanced driver-assistance systems a basic part of their offering, including BYD.
Musk had warned in January that Chinese automakers could “demolish most other car companies in the world” unless regulators intervene with trade barriers, as the Warren Buffet-backed BYD overtook Tesla as the world’s top-selling EV company in the last quarter of 2023.
The U.S. imposed a 100% duty on Chinese EVs last September to protect its homegrown industries from the pricing pressure posed by heavily-subsidized peers from China. The European Union has also moved to impose tariffs as high as 45.3% on Chinese EV cars imported late last year, while Tesla enjoyed a lower tariff rate of 7.8%.
The trade barriers would force Chinese automakers to find buyers at home and in the “smaller, friendlier” foreign markets, adding pressure on Tesla’s sales in China and elsewhere, Fiorani added.
Tesla’s sales of China-made EV cars including exports to foreign markets fell modestly by 0.4% from a year ago to 93,766 units in December, according to CNBC’s calculation of China Passenger Car Association data.
BYD, which is subject to 17% tariff duties for car exports to European Union, still led the rank with 509,440 cars sold in December, a near 50% year-on-year jump.
—CNBC’s Evelyn Cheng and Sonia Heng contributed to this report.
Is Nissan raising the red flag? Nissan is now asking suppliers to delay payments, sparking concern over the automaker’s future.
Nissan asks supplier to delay payments to free up cash
As part of its recovery plan, Nissan announced in May that it plans to cut 20,000 jobs, or around 15% of its global workforce. It’s also closing several factories to free up cash and reduce costs.
According to several emails and company documents (via Reuters), Nissan is working with its suppliers to delay payments.
“They could choose to be paid immediately or opt for a later payment,” Nissan said. The company explained in a statement to Reuters that it had incentivized some of its suppliers in Europe and the UK to accept more flexible payment terms, at no extra cost.
The emails show that the move would free up cash for the first quarter (April to June), similar to its request before the end of the financial year.
One employee said in an email to co-workers that Nissan was asking suppliers “again” to delay payments. The emails, viewed by Reuters, were exchanged between Nissan workers in Europe and the United Kingdom.
Nissan is taking immediate action as part of its recovery plan, aiming to turn things around, the company said in a statement.
“While we are taking these actions, we aim for sufficient liquidity to weather the costs of the turnaround actions and redeem bond maturities,” the company said.
Nissan didn’t comment on the internal discussions, but the emails did reveal it gave suppliers two options. They could either delay payments at a higher interest rate, or HSBC would make the payment, and Nissan would repay the bank with interest.
The company had 2.2 trillion yen ($15.2 billion) in cash and equivalents at the end of March, but it has around 700 billion yen ($4.9 billion) in debt that’s due later this year.
As part of Re:Nissan, the Japanese automaker’s recovery plan, Nissan looks to cut costs by 250 billion yen. By fiscal year 2026, it plans to return to profitability.
Electrek’s Take
With an aging vehicle lineup and a wave of new competition from China, such as BYD, Nissan is quickly falling behind.
Nissan is launching several new electric and hybrid vehicles over the next few years, including the next-gen LEAF, which is expected to help boost sales.
In China, the world’s largest EV market, Nissan’s first dedicated electric sedan, the N7, is off to a hot start with over 20,000 orders in 50 days.
The N7 will play a role in Nissan’s recovery efforts as it plans to export it to overseas markets. It will be one of nine new energy vehicles, including EVs and PHEVs, that Nissan plans to launch in China.
Can Nissan turn things around? Or will it continue falling behind the pack? Let us know your thoughts in the comments below.
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Ford has long been rumored to be in discussions with Tesla about licensing its Full Self-Driving technology, but CEO Jim Farley has now shut down those rumors.
Farley confirmed that Ford talked with Tesla, but he believes Waymo has a better solution.
Back in 2021, Tesla CEO Elon Musk mentioned that he had early discussions with other automakers about licensing self-driving technology, but these discussions didn’t lead to any agreements.
In 2023, the CEO announced that Tesla would be open to licensing Autopilot and FSD to other automakers.
However, a few months later, Musk said “automakers don’t believe Tesla Full Self-Driving is real”, but he claimed they will soon.
In 2024, Musk claimed that Tesla was in discussions with “one major automaker about licensing Full Self-Driving.”
Ford was rumored to be the automaker in question due to its limited effort in autonomous driving and the fact that it was the first automaker to initiate the adoption of Tesla’s charge connector as the new North American standard.
The rumors might have been true, as CEO Jim Farley confirmed that Ford was in talks with Tesla about self-driving during a talk at the Aspen Ideas Festival last week.
He said that he talked with Musk and admitted that both Waymo and Tesla have made progress toward self-driving, but he sees LIDAR, which Waymo uses but Tesla does not, as a critical part of self-driving.
Farley was directly asked what approach made more sense (via Fortune):
“To us, Waymo,” Farley said. He pointed out that both Waymo, owned by Google-parent Alphabet, and Tesla “have made a lot of progress” on self-driving, and Farley acknowledged that he has had conversations with Elon Musk. But he stated that Ford considered LiDAR to be an important part of the picture, noting that “where the camera will be completely blinded, the LiDAR system will see exactly what’s in front of you.”
Ford invested approximately $1 billion in Argo AI, a self-driving startup in partnership with Volkswagen. However, it ceased funding the company in 2022, and Argo AI was subsequently dissolved, with the two automakers integrating their technology.
After this setback, Ford said it would partner with self-driving companies once the technology is further developed.
Waymo has first been focused on developing its own vehicles for autonomous ride-hailing, while Tesla has been trying to bring consumer autonomous vehicles to market.
These different approaches have been reversing lately with Tesla launching a pilot program for its own autonomous ride-hailing fleet after years of failing making its consumer vehicles self-driving.
Meanwhile, Waymo has recently been securing deals with Toyota and Hyundai about integrating its self-driving technology into their consumer vehicles.
Electrek’s Take
Tesla shareholders have been hoping for those talks that Musk has been teasing for years to come to fruition, and have an automaker validate Tesla’s approach to self-driving.
It looks like it won’t be Ford and it looks like Ford might have been that “one major automaker” in discussion with Tesla.
As Farley put it, they want to take a careful approach to self-driving, and if that’s your goal, Tesla might not be the best partner.
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