Electric vehicle maker Tesla has lost its crown as the world’s largest EV seller to China's BYD, despite reporting record quarterly sales in the fourth quarter of 2023, heating up competition in the market.
This could prompt the Texas-based company to announce more price cuts for its vehicles as it attempts to get back in the driving seat, according to industry experts.
The Texas-based company sold 484,507 vehicles in the October-December period, an annual increase of about 20 per cent. Despite a better-than-expected deliveries, it was fewer than the 526,409 EVs sold by BYD in the same period.
Analysts had expected Tesla to announce deliveries of 477,000 vehicles for the final quarter of 2023, according to StreetAccount's compilation of estimates as of December 28.
Shenzhen-based BYD sold 525,409 battery-powered EVs in the fourth quarter, marking its first three-month period when its battery EVs sales outnumbered Tesla's deliveries.
BYD makes both hybrid and battery-run EVs while Tesla produces only the latter.
“I don’t think the price cuts are over, mainly for the reason that demand is still weak. Pricing is a key factor that could help Tesla make up for a possible demand drop and boost revenue,” said Jesse Cohen, senior analyst at Investing.com.
In one of its latest rounds of price cuts announced on October 5, Tesla slashed the prices of its Model 3 and Model Y vehicles in the US by up to 4.2 per cent, according to its website. It was its seventh price cut last year.
“As such, I would not be surprised if Tesla seeks further price hikes in the weeks ahead as trouble starts to brew at some of its competitors, including Lucid Motors and Rivian,” Mr Cohen said.
“At this point, it is clear that Tesla is embarking on a more dynamic way of pricing EVs that other manufacturers would have to follow as [co-founder and chief executive] Elon Musk seeks to balance the fine line between driving sales growth and protecting margins.”
However, despite trailing in the fourth quarter, Tesla maintained its lead over BYD in terms of total annual sales of battery-only EVs last year.
It sold more than 1.8 million vehicles last year, an increase of about 38 per cent from 2022, meeting the goal it announced during an October conference call.
However, the goal was revised down from a sales target of two million announced in January 2023.
In comparison, Warren Buffett-backed BYD produced more than three million vehicles last year, including both hybrid and battery EVs. It sold 1.6 million battery EVs and about 1.4 million hybrid cars.
On Tuesday, Tesla said it produced 494,989 vehicles globally in the fourth quarter, up 12.5 per cent on an annual basis. It manufactured more than 1.84 million units (35 per cent up) across the entire year.
Tesla's shares closed 0.02 per cent down at $248.42 at market close on Tuesday, giving it a market value of $778.42 billion. However, it surged by 0.11 per cent in after-market trading.
The US car maker's shares have surged by about 130 per cent over the past 12 months.
BYD's latest accomplishment serves as a reminder of the obstacles confronting Nasdaq-listed Tesla, analysts said.
“As BYD has accelerated into the fast lane, it's fresh evidence of just how competitive the EV market has become and how hard it will be for Tesla to swerve back to head the pack,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, was quoted as saying by BBC.
What Elon Musk has to say on diminishing performance
Tesla reported a 44 per cent drop in its third-quarter net income, driven by a dip in vehicle deliveries. Production was affected due to “planned downtime” at the car maker's factories.
“At the risk of stating the obvious, it is not possible to have a compound growth rate of 50 per cent forever, or you will exceed the mass of the known universe,” Mr Musk said about the 2024 sales outlook during the last earnings’ call in October.
“But I think we will grow very rapidly, much faster than any other car company on Earth by far.”
Tesla is expected to announce its financial results for the fourth quarter of 2023 on January 24.
Difference between Tesla and BYD
Tesla only offers EVs that are powered solely by batteries whereas BYD, founded in 1995 as a rechargeable battery maker, deals with cars, rail transit, new energy and electronics, with more than 30 industrial parks in China, the US, Canada, Japan, Brazil, Hungary and India.
The majority of its vehicles are priced cheaper than Tesla's and are available in hybrid versions. Its vehicles are currently marketed and sold only in Asia and Europe, and have yet to be introduced to the North American market.
Last month, it teamed up with Amazon Web Services, the world’s biggest cloud services provider, to boost its network of connected vehicles and push its global expansion.
Booming EV market
The car industry's transition to EVs is accelerating. By 2030, more than one in four new passenger cars sold will be an EV, according to S&P Global Mobility report.
The top car makers are expected to account for more than 70 per cent of global EV production by 2030 (compared with 2022 when they represented only 10 per cent of all EV manufacturers), it said.
Last month, the billionaire co-founder of Xiaomi unveiled the company’s first EV, announcing ambitions to become a top global car maker in 15 to 20 years and compete against Tesla and Porsche
In November Tesla, which went public in 2010, delivered its first Cybertrucks, four years after the futuristic vehicles first made their debut.
SPECS
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Maestro
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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5 of the most-popular Airbnb locations in Dubai
Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:
• Dubai Marina
The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.
Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739
Two bedroom: Dh627 to Dh960
Three bedroom: Dh721 to Dh1,104
• Downtown
Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure. “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."
Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154
• City Walk
The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena. “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”
Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809
Two bedroom: Dh682 to Dh1,052
Three bedroom: Dh784 to Dh1,210
• Jumeirah Lake Towers
Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.
Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629
Two bedroom: Dh549 to Dh818
Three bedroom: Dh631 to Dh941
• Palm Jumeirah
Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.
Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770
Two bedroom: Dh654 to Dh1,002
Three bedroom: Dh752 to Dh1,152
Pad Man
Dir: R Balki
Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte
Three-and-a-half stars
57%20Seconds
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Countries recognising Palestine
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Scores
New Zealand 266 for 9 in 50 overs
Pakistan 219 all out in 47.2 overs
New Zealand win by 47 runs
Final results:
Open men
Australia 94 (4) beat New Zealand 48 (0)
Plate men
England 85 (3) beat India 81 (1)
Open women
Australia 121 (4) beat South Africa 52 (0)
Under 22 men
Australia 68 (2) beat New Zealand 66 (2)
Under 22 women
Australia 92 (3) beat New Zealand 54 (1)
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Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
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Alyssa Ayres, Oxford University Press
