In the second quarter of 2024, Tesla's gross margin dropped to a new low after declining every quarter since Q1 2022. As of May, the U.S. automaker and pioneer of getting battery electric vehicles (BEVs) to the mass market still retained the biggest market share among all BEVs sold worldwide in 2024, but only slightly. In the past year, Tesla's share had stood at 19 percent before dropping to 17 percent in first five months of 2024, according to analyses by EV Volumes.
The competition is now hot on Tesla's heels. As our chart shows, the Chinese conglomerate BYD, which produces standalone electric vehicle batteries and associated electronics in addition to plug-in hybrid and fully electric vehicles, increased its market share by 9 percentage points between 2021 and 2024. The BEV portfolio of legacy automakers like Volkswagen and Geely-Volvo stood at 7 and 8 percent, respectively, while SAIC, which includes the joint venture between the Chinese state-owned SAIC Motor and Wuling as well as General Motors, also had a market share of 7 percent as of the most recently available data.
Between 2023 and January to May 2024, BYD's share dropped by 1 percentage point, while Tesla's dropped by two. BYD's deliveries were only around 45,000 cars shy of Tesla's for this time period (or around 9,000 per month), illustrating how close the head-to-head race between these two companies has become. BYD is focused on providing BEVs to a more general consumer base, while Tesla's products have a higher price tag. This difference might be slightly mitigated through the increase of tariffs on Chinese-made cars from 25 to 100 percent announced in May and coming into effect in early August, a move that simultaneously seeks to boost domestic sales and will likely increase tensions between the People's Republic and the United States.
According to EV Volumes, 14 million electric vehicles were sold globally in 2023, 70 percent of which were BEVs. However, 84 percent of all light vehicles sold still ran on traditional combustion engines or other non-electric fuel sources. The biggest exporter and market for both hybrids and BEVs was China with shares of 65 and 59 percent, respectively.
