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Powered by Elon Musk's allegiance to president-elect Donald Trump, Telsa (TSLA) charged to record highs by mid-December on the expectation that the incoming Trump administration would take a relaxed regulatory approach to TSLA's robotaxi aspirations. However, TSLA shares abruptly reversed course over the past week, ending 2024 on a sour note, and that weakness has carried over into 2025 after the EV maker reported disappointing Q4 deliveries. Meanwhile, the company's Chinese counterparts, such as BYD Company (BYDYY), NIO (NIO), ZEEKR (ZK), and XPeng (XPEV), continued to achieve robust delivery growth in December as the PRC government throws its weight behind new energy vehicles by offering incentives and subsidies.

• TSLA's deliveries grew by about 2% yr/yr to 495,570 vehicles in Q4, setting a new company record, but falling a bit short of analysts' expectations. The miss comes even as TSLA ramped up its own discounts and incentives in a year-end push to meet its forecast of positive sales volume growth in Q4. With the Q4 delivery shortfall, TSLA also suffered its first annual decline in deliveries, which slipped by 1.1% yr/yr to 1.79 mln vehicles for 2024.
• A combination of slowing EV demand and intensifying competition, especially in China, are taking a toll on TSLA. On that note, BYDYY reported that its sales volume jumped by over 41% in December to 514,809 vehicles, lifting its total volume to about 1.76 mln units for the year. With BYDYY now right on TSLA's tail, the company is poised to overtake TSLA and become the world's largest EV maker this year.
• XPeng (XPEV), another rising competitive threat to TSLA, saw deliveries soar by 82% yr/yr in December to 36,695 vehicles. Despite the stiff macroeconomic headwinds and associated slowdown in EV demand, XPEV and other Chinese EV makers have aggressively launched new models in an effort to gain market share. This past August, XPEV launched its more affordable MONA sub-brand when its first model, the MONA M03 hatchback coupe, entered the market. In December, deliveries of the MONA M03 exceeded 15,000 units.
• By utilizing the same main platform to develop different models, Chinese EV makers are able to significantly reduce the amount of time it takes to update vehicles or to even launch entirely new models. This standardized approach helped NIO to launch its new family-oriented ONVO brand last May. After achieving deliveries of 5,082 in December, ONVO generated deliveries of 10,582 in December, helping to push NIO's total deliveries higher by 73% to 31,138 for the month.

The main takeaway is that TSLA appears to have lost more ground to its competitors in Q4, even after ramping up discounts and incentives. However, with TSLA preparing to launch a lower-priced model in 2025, the company should be in line to return to solid delivery growth again this year.