Tesla on Thursday reported its first annual decline in vehicle deliveries. That's because Tesla delivered fewer electric vehicles than expected in the fourth quarter and incentives failed to boost demand for its aging model lineup.
The company's stock price fell more than 5%, showing investors' concern about the challenges facing CEO Elon Musk, who has said that promotions such as zero-interest financing will increase delivery numbers in 2024. It was expected that there would be a “slight increase”.
Subsidy cuts in Europe, a shift to lower-cost hybrid cars in the U.S. and increased competition, especially from China's BYD, are putting pressure on Tesla.
In response, Mr. Musk pivoted Tesla to self-driving taxis and backed President-elect Donald Trump with millions of dollars in campaign funds in hopes of loosening regulations on the company.
Tesla delivered 495,570 vehicles in the three months ended Dec. 31, below expectations of 503,269 vehicles, according to 15 analysts surveyed by LSEG. Production volume during the same period was 459,445 units, a decrease of approximately 7% compared to the same period last year.
According to 19 analysts surveyed by LSEG, vehicle deliveries in 2024 will be 1.79 million vehicles, down 1.1% from the previous year and lower than the forecast of 1.806 million vehicles.
This outpaced rival BYD, which reported a 12.1% increase in battery electric vehicle sales in 2023 to 1.76 million units due to competitive pricing and strong expansion into Asian and European markets.
Self-driving technology is still years away, and analysts say Tesla will need cheaper versions of its current cars to meet Musk's goal of 20% to 30% sales growth in 2025. He said it would have to rely on the Cybertruck.
Analysts say demand for the truck, known for its futuristic design, is showing signs of slowing.
Tesla has not yet begun deliveries of the Cybertruck. The company announced Thursday that it has delivered 471,930 Model 3s and Model Ys, as well as 23,640 other models, including the Model S sedan, Cybertruck and Model X premium SUV.
David Wagner, portfolio manager at Tesla shareholder Aptus Capital Advisors, said: “Tesla is planning for the first half of 2025 to gain confidence in the opportunity for year-on-year growth in 2025 vehicle deliveries. “We will continue to rely on the launch of new lower-priced models.”
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Tesla stock has been on a roll in 2024, rising more than 60% thanks to Trump's election victory.
Musk has said he intends to use his promised role as government efficiency czar under the Trump administration to advocate for a federal approval process for self-driving cars to replace the current state-specific laws. He said it would be “incredibly painful” to move forward with this.
Tesla's Autopilot and “full self-driving” technology, which is not yet fully self-driving, has come under intense scrutiny due to lawsuits, investigations by U.S. traffic safety regulators, and criminal investigations by the Justice Department. are.
A major concern is that Tesla is exaggerating the self-driving capabilities of its vehicles.
Tesla is also under pressure from traditional automakers. According to data research firm JATO Dynamics, registrations in Europe fell by 24% in October due to a tight race with Volkswagen Group. The Volkswagen Group's SUV Skoda Enyak has been dethroned by the Model Y as the region's best-selling EV.
Tesla's car sales margins came under pressure last year due to low prices and incentives. But Wall Street expects demand to rebound in 2025 as the Federal Reserve lowers interest rates.
