In the fourth quarter of 2023, Tesla sold more electric vehicles than expected, but this was not enough to surpass Chinese automaker BYD in global sales of electric vehicles, Bloomberg writes.

Tesla sold 484,507 electric vehicles in the final three months of 2023, beating analysts' average forecast of 483,173. BYD's sales during the period totaled 526,409 electric vehicles, making it the new leader in the electric vehicle market, mainly thanks to a much wider range of cheaper models in China.

Tesla generates more revenue and profit than BYD because the prices of its electric vehicles are significantly higher. The American company relies on just two models that account for the lion's share of sales – the Model Y crossover and the Model 3 sedan. They accounted for 95% of deliveries in the fourth quarter. While Tesla doesn't break out quarterly EV sales by region, the U.S. and China are its largest markets.

Tesla met its goal of delivering 1.8 million electric vehicles last year, but failed to achieve the scenario that CEO Elon Musk envisioned 12 months ago of delivering 2 million electric vehicles. And even a series of price cuts for electric vehicles failed to stimulate demand high enough to support such a volume of production. That frustrated investors, sending Tesla shares down 1.6% shortly after regular trading began Tuesday on the New York Stock Exchange.

As Bloomberg noted, the change in the ranking of electric vehicle manufacturers reflects China's growing influence in the global auto industry. Having overtaken the United States, South Korea, and Germany over the past few years, China could also overtake Japan, which ends 2023 as the world's largest exporter of passenger cars.

With the launch of the Cybertruck, Tesla has entered the highly competitive pickup truck market in the United States. Musk warned it could take 12 to 18 months to reach volume production of the Cybertruck, and the model has begun generating positive cash flow.