Tesla is facing many challenges in 2024. These range from constraints in scaling up production to the possibility of a decline in sales growth over the 12 months this year. And even as competition heats up in the electric vehicle (EV) sector, catching up may be even more difficult.
Tesla is considering manufacturing next-generation EVs at its Texas plant from the second half of 2025. This is mainly due to the number of new technologies that are being planned to be included. According to Tesla CEO Elon Musk himself, the change will take some time. And this comes at a time when demand for EVs is likely to slow down a bit.
Tesla reported a decline in fourth-quarter gross margin and predicted lower sales growth than previously calculated. According to Wall Street estimates, the company will be able to sell about 2.2 million (22 lakh) EVs, which could be about 21 percent more than the 2023 figures. But still much less than the long-term target of 50 percent. And playing a very aggressive price game by rivals in key EV markets like China and the US could also squeeze margins.
Rise of Chinese EV players
China’s BYD recently overtook Tesla in terms of production in the last quarter of 2023. He is fully prepared to maintain his lead. A major factor working in its favor is where it performed extremely well within China. Now it is also expanding its presence in many major markets abroad. Its pressure is increasing and Tesla is facing this competition.
Musk himself recently admitted that Chinese carmakers will be able to play a much bigger role outside China. “If no trade barriers were put in place, they would pretty much collapse most other car companies in the world.”