During the fourth quarter of 2023, Tesla set a new record for global electric vehicle (EV) sales. However, the company’s market share is not growing as quickly as it has in the past.
Based on industry data (trailing by twelve months) highlighted in Tesla’s Q4 financial report, the brand’s market share in the United States and Canada combined recently reached 4%, marking the highest level ever recorded. However, the growth appears to have slowed down significantly, with the curve showing minimal change.
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Tesla EV sales growth slows down
In 2023, Tesla delivered a record number of over 1.8 million electric cars, representing a 38% increase over the previous year. However, the growth rate in Q4 was below 20% despite price cuts, and the year 2024 might present challenges as well.
It appears that increasing market share is challenging due to the overall market rebounding from previous years.
A similar, or slightly worse, situation is occurring in Europe. Data shows that Tesla’s market share has marginally weakened from nearly 3%. This may explain the price reductions seen in the Model Y in multiple European markets.
Meanwhile, in China, Tesla’s market share continues to rise, although it remains notably lower than in Europe and the U.S./Canada.
The key challenge for Tesla is to increase EV sales and market share in 2024. However, the latest projections from the company suggest that the growth rate is expected to be “noticeably lower” this year.
The situation may significantly improve for Tesla once the next generation of more affordable electric cars is launched in 2025. However, if the launch is in late 2025, it could be at least two years until the next big wave of growth.
Tesla explains: “Our company is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform, and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform. In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas.”
Since 2008, Tesla has sold approximately 5.5 million electric cars globally, with an annual output of 1.8 million.