Last year, Tesla's sales dropped for the first time in over a decade, as demand weakened and competitors picked up speed.
The company, led by billionaire Elon Musk, delivered nearly 1.79 million cars last year, a slight decline of about 1% from the 1.8 million in 2023.
Despite repeatedly lowering prices in a bid to attract buyers and maintain its position as the world's leading electric vehicle (EV) maker, Tesla struggled.
Meanwhile, China's BYD appears poised to narrow the gap, having reported 1.76 million EV sales in 2024.
BYD, based in Shenzhen, saw its total vehicle sales surge over 41% in 2024 compared to the previous year, exceeding 4.2 million units, chiefly attributed to hybrid car sales.
With 90% of its sales in China, BYD has been outpacing foreign rivals like Volkswagen and Toyota in its home market, benefitting from increased car sales facilitated by intense competition, lowered prices, and government subsidies encouraging consumers to switch to EVs or other fuel-efficient options.
Although China is a significant market for Tesla as well, the company has faced stiff competition and lost ground to rivals in the ongoing price competition.
Softened demand for electric vehicles in regions like the US and Europe has posed challenges for various automakers.
Companies such as Volkswagen, Ford, and General Motors either reduced sales targets or postponed investments in EV technology last year.
At Tesla, CEO Elon Musk attributed weakened sales partly to rising borrowing costs since 2022, which have increased the expense of purchasing vehicles.
Analysts also highlighted heightened competition and concerns about the brand as Musk expands his political involvement, generating controversy.
Tesla experienced a sales decline in the first half of 2024, but saw a rebound in the latter part, delivering about 495,000 vehicles in the final quarter, marking a 2% annual increase and a record for the quarter.
Despite last year's more than 60% surge in share price, Tesla's stock dropped 5% in early trading upon delivering sales figures below the roughly 500,000 forecast by analysts.
Christopher Carey from the Carnegie Investment Council remarked, "If you don't meet expectations, it can be pretty tough out there."
His sudden departure from the company, which holds brands such as Vauxhall, Jeep, Fiat, Peugeot, and Chrysler, happened two months after Stellantis issued a profit warning.
Certain governments have intervened to shield domestic firms, while BYD continues to strengthen its presence in developing countries.
BYD affirmed its commitment to full compliance with Brazilian legislation after severing ties with the construction firm involved.