Tesla was overtaken by Chinese company BYD, which is now the leader in sales of electric vehicles.

Tesla Inc. delivered more vehicles than expected in the fourth quarter, though not enough for the Elon Musk-led company to stay ahead of the Chinese company BYD Company in global sales of electric vehicles (EV).

Tesla delivered 484,507 Vehicles over the past three months exceeded analysts’ average estimate of 483,173 deliveries. BYD sold out 526,409 Fully electric vehicles will become the new number one EV this quarter, driven primarily by its wide range of affordable models in China.

Although Austin-based Tesla surpassed its target of delivering 1.8 million vehicles for the year, Elon Musk’s automaker fell far short of the bullish outlook the South African-born businessman outlined 12 months ago.

The CEO told analysts the company has the capacity to produce 2 million carsA series of price cuts failed to increase demand enough to sustain that production.

Tesla shares fell as much as 1.6% shortly after the start of regular trading in New York on Tuesday. The stock surged 102% last year, recovering from record losses tied to Musk’s 2022 acquisition of Twitter, the social media company now known as X.

The change in electric vehicle sales rankings reflects China’s growing weight in the global auto industry. China could overtake Japan as the world’s largest exporter of passenger cars by 2023, after overtaking the United States, South Korea and Germany in recent years.

Tesla makes more revenue and profits than BYD because it sells much higher-priced vehicles and relies on only two models for the majority of its sales. The Model Y sports utility vehicle and Model 3 sedan accounted for 95% of deliveries in the fourth quarter.

Musk expanded Tesla’s range late last year, delaying sales of the Cybertruck by several years. The company did not say how many stainless steel-clad trucks it produced and delivered before the end of the year.

The launch of the Cybertruck marked Tesla’s entry into the competitive US truck market. Musk has warned that it could take 12 to 18 months for the company to reach production volumes and generate positive cash flow with this vehicle, which is difficult to manufacture and packed with new technologies.

Although Tesla does not break down quarterly vehicle sales by region, the United States and China are its biggest markets. The company manufactures the Models S, X, 3, and Y in Fremont, California, and the Models 3 and Y in Shanghai. It also produces the Model Y at its plants outside Austin and Berlin.

(c)Bloomberg