A Tesla charging station is seen, Sept. 28, 2023, in Woodstock, Ga. Tesla is expected to report fourth quarter and full-year sales Tuesday as electric vehicle sales growth continues to slow. (AP Photo/Mike Stewart, File)
Tesla Inc. managed to boost its fourth-quarter vehicle sales by nearly 20% through significant price reductions, even as the broader electric vehicle (EV) industry experienced a slowdown in growth.
The Texas-based electric vehicle maker announced on Tuesday that it successfully sold 484,507 vehicles globally from October to December, surpassing Wall Street estimates of 473,000 for the quarter, as reported by data provider FactSet.
For the entire year, Tesla reported selling just over 1.8 million vehicles, reflecting a 37.7% increase from the 2022 figures. While this annual performance fell short of CEO Elon Musk's ambitious prediction of 50% sales growth, it did surpass the company's internal target of achieving 1.8 million vehicle sales for the year.
To drive sales, Tesla implemented substantial price cuts throughout the year, reducing prices in the U.S. multiple times, including substantial cuts of up to $20,000 on some higher-priced models. Even the entry-level Model 3 saw a price reduction of at least $6,600. Industry analysts anticipate that these price reductions may impact Tesla's profit margins, with the company set to report earnings on January 24 after the markets close.
Despite these challenges, Tesla successfully maintained its position as the world's leading seller of electric vehicles, fending off competition from Chinese giant BYD. BYD reported an impressive 73% increase in EV sales for the previous year, reaching 1.57 million.
Tesla's sales were primarily driven by its more affordable Models 3 and Y, with global deliveries reaching 461,538 in the fourth quarter, marking a 19% increase from the previous year. Sales of other models, including the S and X, along with the introduction of the new Cybertrucks, experienced a 34% growth, totaling 22,969. However, the company did not provide a detailed breakdown of sales for individual models.
In terms of production, Tesla manufactured nearly 495,000 vehicles during the quarter, exceeding deliveries by around 10,000 units. While the announcement positively impacted Tesla's sales performance, the company's shares experienced a slight decline in Tuesday afternoon trading.
