Tesla surpassed one of Germany’s most prized premium car brands last year, despite selling fewer vehicles than expected.

Volkswagen’s Audi sold 1.67 million vehicles in 2024, down 12% from a year earlier. Its struggle with intensifying competition in Europe and China and weak demand for its electric models dropped the brand behind Elon Musk’s Tesla, which delivered 1.79 million vehicles last year.

Tesla’s year wasn’t without issues. The US company posted its first annual deliveries decline in over a decade and only narrowly retained its lead over China’s BYD as the top seller of fully electric vehicles.

But Tesla’s rapid expansion in the preceding few years positioned the company to take advantage of any slip-ups by incumbents. Its Model Y sport utility vehicle ranks among the world’s best-selling cars and is getting a facelift this year.

Germany’s car makers, meanwhile, are contending with tepid demand for luxury cars in China, where a recovery remains uncertain and local manufacturers are pushing further upmarket. In Europe, EV sales are below expectations after several countries cut subsidies. The problems led to a wave of profit warnings last year, including from Volkswagen, Mercedes-Benz and BMW.

Audi’s sales fell in markets including Germany, China and North America. Deliveries of fully electric models declined 8% to around 164 000.

Paring back

Manufacturers have started paring back production in response to their sales slowing down, with Volkswagen reducing capacity at its namesake brand. Audi plans to close a site in Brussels because of poor demand for the electric Q8 e-tron sport utility vehicle made there.

Read: Meet the Tesla Cybercab, Elon Musk’s autonomous robo-taxi

Audi plans to update models including the A7 sedan and Q3 SUV this year to bolster sales. “Customers can look forward to numerous new plug-in hybrids as well,” CEO Gernot Döllner said Monday in a statement. — Stefan Nicola, (c) 2025 Bloomberg LP

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