Tesla's 14th week of Q1: Trump's surprise, fresh colors unveiled, hopes for Q2, BYD stays in the lead
Tesla, the global leader in electric vehicles (EV), faced a significant setback in Q1 2025, with a 13% drop in sales compared to the beginning of 2024. The company sold 384,122 cars during this period, a decline from 433,371 in Q1 2024.
One of the key factors contributing to this decline is the increased competition, particularly from BYD, the world's largest EV maker by sales. Despite a slow production growth rate, BYD's sales have been robust, with expectations of a 45% increase in global EV sales for 2025. This contrasts with Tesla's projected 10% decline in EV sales for the year.
In Q1 2025, BYD sold nearly 1 million vehicles, with 416,388 being pure electric vehicles. This marked the second consecutive quarter and the third time overall that BYD sold more pure electric vehicles than Tesla.
The regional dynamics also played a role in Tesla's Q1 performance. While China, a crucial market for BEV sales, saw a 5.36% year-over-year decline in Tesla sales, there was an uptick in June, particularly for the Model Y. Europe and Australia also experienced a decline in Tesla's sales, part of a broader global trend affecting the company.
Tesla introduced two new colour options for the Model Y and the Model 3 in both Europe and the US. In the US, the "Diamond Black" colour option is priced at $1,500, while "Deep Blue Metallic" is available for €1,300 in Europe.
Lars Moravy, Vice President of Vehicle Development at Tesla, invited customers to share suggestions for improving Tesla for 2026. This invitation was met with over 2 million views and over 8,000 responses by Saturday afternoon.
Analysts had initially expected Tesla to grow again in 2025, but many lowered their forecasts after the Q1 numbers were published. The decline in Tesla's sales was widely described as unprecedented before its occurrence, with JP Morgan making this observation.
The decline in Tesla's sales was not solely attributed to the company's performance. German Vice-Chancellor and Economy Minister Robert Habeck suggested that the enthusiasm for Tesla has waned, potentially creating an opening for German manufacturers. Additionally, Elon Musk was accused of harming the Tesla brand with his close ties to Trump and his own DOGE actions by some analysts.
Despite the Q1 disappointment, Tesla's stock held up relatively well. However, it collapsed along with global markets after US President Trump announced broad and high tariffs.
BYD is gaining attention for its FSD functions similar to Tesla's and electric vehicles that can be fully recharged in just a few minutes with up to 1 megawatt of power. This advancement could pose a significant challenge to Tesla in the future.
In conclusion, Tesla's Q1 2025 sales were impacted by increased competition, particularly from BYD, and other factors like brand reputation concerns. The company is engaging with customer suggestions for improvements and is offering new colour options for its models. The broader context suggests that tariffs could be part of the challenging environment for automakers, including Tesla.
- The increased competition from BYD, the world's largest EV maker, is a significant factor contributing to Tesla's 13% drop in EV sales in Q1 2025.
- In the world of finance, analysts had initially expected Tesla to grow again in 2025, but many lowered their forecasts after the Q1 numbers were published, describing the decline in Tesla's sales as unprecedented.
- As part of a broader lifestyle shift towards electric vehicles, BYD sold nearly 1 million vehicles in Q1 2025, including 416,388 pure electric vehicles, marking the second consecutive quarter and the third time overall that BYD sold more pure electric vehicles than Tesla.
- In an effort to diversify its product offerings and improve customer satisfaction, Tesla introduced two new color options for the Model Y and the Model 3 in both Europe and the US, with prices ranging from $1,500 to €1,300.
