Tesla’s stock (TSLA) experienced a significant drop at the start of 2025 following a weaker-than-expected fourth-quarter delivery report and an overall decline in deliveries for the year. This performance raises questions about the electric vehicle (EV) giant’s future growth trajectory and the increasingly competitive landscape.
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Tesla reported delivering 495,930 vehicles globally in the fourth quarter of 2024, falling short of analyst projections of approximately 510,400. While this figure surpasses the 463,000 deliveries in the previous quarter and the 484,500 deliveries in the same period last year, it still marks a significant miss.
A Year of Declining Deliveries for Tesla
More concerning is Tesla’s full-year performance. The company delivered 1.78 million vehicles in 2024, missing analyst estimates of 1.8 million and marking the first year-over-year decline in the company’s history. This downturn suggests that intensifying competition, fluctuating demand, and global economic headwinds may be impacting Tesla’s dominance. The stock responded to the news with a 6% drop on Thursday.
Rising Competition from BYD
Adding to the pressure, Chinese automaker BYD (BYDDY) reported delivering approximately 4.3 million passenger cars globally in 2024. While 2.5 million of those were hybrid vehicles, BYD’s purely electric vehicle deliveries totaled around 1.76 million, posing a significant challenge to Tesla’s market leadership.
Bullish Outlook for Tesla’s Future
Despite the disappointing results, some analysts remain optimistic about Tesla’s long-term prospects. Wedbush analyst Dan Ives, for instance, anticipates a significant rebound in 2025, projecting a 20%-30% growth in deliveries driven by the launch of a lower-priced EV model.
Beyond Vehicle Sales: FSD and Robotaxis
Ives also highlights the potential of Tesla’s Full Self-Driving (FSD) software, the rollout of robotaxi testing, and upcoming products like the Cybertruck as key catalysts for future growth. He believes these innovations could propel Tesla’s market capitalization to $2 trillion and beyond.
Focusing on the Long-Term Vision
While the 2024 delivery miss may raise concerns in the short term, the focus remains on Tesla’s ability to accelerate delivery growth in 2025 and capitalize on its advancements in autonomous driving technology. Ives suggests that any sell-off related to the weaker Q4 results presents a buying opportunity for long-term investors. The coming year will be crucial for Tesla to demonstrate its ability to navigate the challenges of a more competitive market and deliver on its ambitious vision for the future of transportation.
