US carmaker Tesla reported a 13pc drop in sales of battery electric vehicles (BEVs) in the first quarter on production challenges, consumer backlash,intense competition, and rising costs.
Tesla delivered 336,681 units in the first quarter of 2025, down 13pc from the 386,810 it delivered in the same period last year.
Following inventory reductions in the fourth quarter of 2024, Tesla's production surpassed deliveries in the first quarter, reaching 362,615 units, but production challenges remain as the automaker upgrades its best-selling model, the Model Y.
"While the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1, the ramp of the New Model Y continues to go well," Tesla said.
In March, Tesla China sold 43,370 units of the redesigned Model Y, making it the best-selling battery electric vehicle by volume.
While Tesla's volatile results in China shows signs of recovery, its sales in other regions are undergoing a structural shift.
Tesla's chief executive Elon Musk's support for Germany's far-right AfD party alienated consumers in Europe. Tesla's new car registrations fell 49pc to 19,046 units in January-February from a year earlier, while overall battery electric vehicle registrations rose by 28pc to 255,489 units over the same period, according to data from European Automobile Manufacturer's Association.
Intense competition further eroded market share. China's electric vehicle maker BYD aims to double its sales outside China to over 800,000 units by 2025, up from 417,204 in 2024.
In the US, Tesla will soon face rising costs due to tariffs, as President Donald Trump Wednesday imposed a baseline 10pc tariff on all countries.
Though all of its cars are assembled in the US, Tesla has at least 20pc content imported from Mexico, according to data from National Highway Traffic Safety Administration (NHTSA).
The NHTSA does not break down the 65-70pc content from the US and Canada, but the tariff on Canada will increase the portion of content subject to the tariff.
By Carol Luk
