Tesla (TSLA, Financial) reported stronger sales than anticipated, surpassing Audi, one of the top luxury car brands. Tesla delivered 1.79 million vehicles, eclipsing Audi's 1.67 million, a 12% year-over-year drop, in 2024. The automotive landscape is changing, with increasing competition in Europe and China and declining electric vehicle demand.
German automakers face challenges as luxury car demand wanes. In China, local manufacturers are moving into the premium sector. In Europe, EV sales fell short after subsidy reductions. This environment led companies like Volkswagen, Mercedes-Benz, and BMW to issue profit warnings last year. Audi reported sales declines in key markets such as Germany, China, and North America; fully electric model deliveries fell 8% to approximately 164,000 units.
Automakers have started reducing production in response to slowing sales. Volkswagen has cut capacity for its namesake brand, and Audi plans to close a Brussels factory due to low demand for its Q8 e-tron electric SUV. Despite surpassing Audi, Tesla still faced challenges, showing its first annual delivery decrease in over a decade. Moreover, its lead over BYD is narrowing, though Tesla remains the world's top-selling full-electric vehicle brand.
