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Tesla Breaks Records In Q4 Sales, But BYD Of China Takes The Top Rank Among EVs

Tesla Breaks Records In Q4 Sales, But BYD Of China Takes The Top Rank Among EVs
While hitting its 2023 objective and exceeding market expectations, Tesla produced a record number of electric vehicles in the fourth quarter, but China's BYD overtook it as the leading EV manufacturer.
In the October to December quarter, Tesla delivered 494,989 EVs; this was less than the 526,409 vehicles that BYD, financed by Warren Buffett, turned over, primarily in China. This suggests that consumers were shopping around for less expensive models in an economy with high borrowing rates.
The American manufacturer delivered 1.8 million cars this year, mostly because to its year-end sales drive, but it fell short of CEO Elon Musk's lofty internal objective of 2 million vehicles annually.
For the entire year, it is still in front of BYD, though. About 1.4 million of the 3.02 million vehicles delivered by the Chinese company were plug-in hybrid electric vehicles.
In a generally worse market, Tesla stock, which doubled in value last year, was almost unchanged on Tuesday.
Deliveries from BYD demonstrate that the Chinese company is benefiting from price reductions, according to Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"The fight will hurt margins for both companies, but BYD clearly believes it's a price worth paying to increase market share and recognition," she added.
In an effort to drive sales before some versions of its small Model 3 vehicle lost U.S. federal tax credits in 2024, Tesla raised discounts and provided incentives including six months of free fast charging if buyers received deliveries by December 31.
According to 14 analysts surveyed by LSEG, this enabled it register a gain of 11% over the most recent quarter and higher than predictions of 473,253.
Following a production stoppage in the third quarter for assembly line upgrades, it produced a record 494,989 vehicles in the quarter, bringing the total production in 2023 to 1.85 million units.
Deliveries from Tesla are "much, much, much better than domestic U.S. car companies," according to Gary Bradshaw, portfolio manager at Tesla shareholder Hodges Capital.
Tuesday saw deliveries from smaller rival Rivian as well; nonetheless, the business fell short of market projections amidst a general decline in demand for EVs.
The vulnerability has made American automakers, like as Ford and General Motors, more circumspect about their projections for EV production capacity.
Regulators are also keeping an eye on Tesla's self-driving technology; last month, the company recalled over 2 million cars to add extra security to its advanced driver-assistance Autopilot system after a federal safety regulator raised concerns about safety.
The influential American non-profit Consumer Reports, which extensively evaluates automobiles, household appliances, and other products, stated in its early assessment that the software update to address problems was insufficient and did not go far enough to avoid misuse and driver error.
According to some analysts, Tesla may need to extend the price reductions that it began in January of last year in order to sustain demand, as the expiration of the Inflation Reduction Act (IRA) tax incentives caused sales to accelerate into the fourth quarter.
"Tesla may have to cut prices further, especially for a vehicle like the versions of the Model 3 that lost their tax credit," said Seth Goldstein, equity strategist at Morningstar.
This year, the federal tax credits of $7,500 for the long-range and rear-wheel drive models of Tesla's Model 3 are no longer available due to new IRA regulations about the source of battery material.
However, Goldstein noted that the majority of the price reductions were a reaction to the US Federal Reserve's hike in interest rates, suggesting that Tesla would keep pricing stable if borrowing costs begin to decline.
During the quarter, Tesla delivered 461,538 Model 3 cars and Model Y sports utility vehicles, while about 23,000 of its other models were delivered.
Tesla did not say whether the recently unveiled Cybertruck was part of the deliveries.

Christopher J. Mitchell

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