Has Tesla peaked? Trailblazing American brand looks to be running out of charge as electric car sales flag and new rivals such as BYD, GWM, MG, Zeekr, Xpeng and more rise | Analysis

The revolution hasn’t been canceled, but it appears to be delayed.

All the talk of electric vehicles taking over by the end of the decade has disappeared in recent times, as car makers realise the majority of motorists are simply not ready to make the switch. And that impacts one brand more than any other — Tesla.

It does so for two reasons. Firstly, because Tesla sells the most EVs in Australia, and secondly, because it doesn’t sell anything else.

As brands like BYD, Toyota, Hyundai, Kia and the rest can pivot between electric cars, hybrids and petrol-powered models, Tesla’s fortunes are directly tied to the acceptance of EVs by the car-buying public.

And in 2024 the numbers weren’t good, sales for the brand were down a sizeable 16.9 per cent in Australia. Sales were down nine months in '24, with a big December helping to soften the blow. Crucially, though, Tesla sales were down 1.1 per cent globally, representing the first time the brand had ever gone backwards in a calendar year.

Which raises the question: has Tesla peaked?

Make no mistake, Tesla isn’t going anywhere soon, the brand still accounted for more than 40 per cent of the total Australian EV market. But a nearly 17 per cent drop year-on-year is a major backwards step, especially when there were no major supply chain disruptions and Australian sales hit a record high.

However, when you look at the trends, it doesn’t look good for the American brand. While it may have had 42 per cent of total EV sales locally in '24, that was down from 52 per cent in '23 and 58 per cent in '22. That’s a 16 per cent market share drop in just two years, and comes as Tesla faces increased pressure, not just from the established brands but from the new wave of Chinese rivals, like MG, BYD, Zeekr and more.

The challenge for Tesla is to recover lost ground without any major changes due. Yes, the updated Model Y has just been revealed and will likely provide a sales bump, but it’s merely an update of an existing model.

There are no plans for Tesla to expand its Australian range, with the Cybertruck, still ‘USA-only’ and unlikely to be offered here anytime in the foreseeable future.

With no expansion to the range, Tesla will need to hope it can continue to find buyers looking for an electric mid-size sedan and mid-size SUV. While it actually has great success in those markets, mid-size sedans remain a declining segment (with the on-paper drops slowed significantly by the Model 3 and Toyota Camry), so buyers will inevitably become harder and harder to find.

That’s the biggest challenge for Tesla, as it would be for any car company — finding new buyers every year with only two models to choose from. Even Toyota would struggle if it only offered the Camry and RAV4, there’s only so many customers when you have a limited range.

With no reinforcement of its line-up expected, combined with the increasing diversity of its rivals, it’s hard to see Tesla achieving record sales again. Frankly, even a steady year of sales in 2025, rebounding slightly from its '24 drop and cementing its place as the EV sales leader would be considered a success. Until the EV revolution restarts, this will have to be Tesla’s new normal.