BEIJING, January 3 (TMTPost)— Tesla Inc. set new delivery record but still trailed behind its Chinese arch rival BYD Co. Ltd.

Credit：Visual China

Tesla said it delivered 484,507 vehicles in the fourth quarter of 2023, slightly beating the Wall Street estimated delivery of 483,173 units. The combined delivery of Model 3/Y stood at 461,538 vehicles, accounting for around 95% of total delivery that quarter. The figure fell short of the estimates of 462,523 units.The U.S. electric vehicle (EV) giant produced 494,989 vehicles in the quarter ended December, better than analysts expected of 482,336 units, and 476,777 vehicles out of the output are Model 3/Y models, again topping analysts’ forecast of 468,680 units.

Tesla capped 2023 with the record quarterly delivery and brought the yearly delivery to 1.81 million with a 38% year-over-year (YoY) increase. Its production for the year grew 35% YoY to 1.85 million. The figure marked Tesla hit its annual target of 1.80 million, but it failed to meet CEO Ellon Musk’s expectation. Musk said in last January that his company had the potential to achieve 2 million deliveries in 2023.

Despite the year-end beat, Tesla for the first time ceded the crown of quarterly EV sales to BYD. BYD released at the beginning of this month that it sold 526,409 full-electric vehicles in the last quarter of 2023, over 41,900 vehicles higher than sales of Tesla the same period. While Tesla was still ahead of BYD for the full year, it was overtaken by BYD in terms of annual growth.  BYD sold nearly 1.6 million battery electric vehicles (BEVs) in 2023, surging more than 70% from 2022.

BYD sold 341,043 new energy vehicles (NEVs), including BEVs and plug-in hybrid electric vehicles (PHEVs), in December.That month was the eighth straight month for BYD to set new record after sales first topped a 300,000-unit milestone in October. Sales in December surged 45% year-over-year (YoY), accelerating from the previous month’s growth of 31%. Sales from January to December totaled 3.0244 million units, consolidating BYD’s leadership in China. The data suggested BYD managed to meet its annual target of 3 million NEVs. BYD chairman Wang Chuanfu said in March 2022 that his company aimed to sell at least 3 million vehicles in 2023.

Financial results showcased BYD has once again beat Tesla by quarterly gross margin. BYD posted revenue of RMB162.15 billion in the third quarter and increased net income 82.16% YoY to RMB10.41 billion that quarter. That is BYD’s first time to rake more than RMB10 billion in a quarter. More impressively, BYD’s gross profit margin in the third quarter edged up 1.07 percentage points YoY to 19.79%, widening its gap between Tesla. The U.S. EV giant reported a gross margin of 17.9% that quarter, falling from 25.1% a year earlier, when it had not yet begun the price cuts. This is the second straight quarter that Tesla was overtaken by BYD in terms of margin. In the June quarter, BYD posted gross margin of 18.72%, up 4.33 points YoY, for the first time triumphing Tesla, while the latter’s margin dropped 6.8 points YoY to 18.2%, highlighting the profit was severely dented by major price cuts.