Tesla Inc. reported a decline in annual vehicle sales for the first time in over a decade in 2024, despite achieving record deliveries in the fourth quarter. The electric vehicle (EV) manufacturer sold 1.79 million vehicles, slightly below the 2023 figure and analysts’ expectations.
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This outcome highlights the challenges faced by EV companies, even amidst growing excitement surrounding autonomous driving technology and Elon Musk’s relationship with then President-elect Donald Trump. Sluggish consumer demand for electric cars, potentially worsened by anticipated changes to EV incentives under the Trump administration, contributed to the sales dip. Following the announcement, Tesla’s shares fell 5.8%, contrasting with a 63% surge in 2024.
Q4 Deliveries and Missed Targets
While Tesla delivered a record 495,570 vehicles in the fourth quarter of 2024, this figure fell short of the projected 512,277 vehicles. The company needed to sell approximately 515,000 vehicles to meet its annual growth target. Barclay’s analyst Dan Levy noted that the results underscored the challenges Tesla faces in achieving 2025 growth targets with existing models and its reliance on the yet-to-be-released, more affordable vehicle.
Challenges and Growth Strategies
Tesla encountered several obstacles in 2024, including an arson incident at its Berlin factory, shipping disruptions, and a broader industry slowdown in EV sales. The company acknowledged experiencing a lull in demand between two major growth periods. In response, Tesla implemented workforce reductions, including sales staff, in April 2024.
Despite these challenges, Tesla had maintained its expectation of modest delivery growth for 2024, implementing various year-end incentives related to financing, charging, and leases. Elon Musk projected 20% to 30% growth for 2025, driven by the launch of a more affordable vehicle and advancements in autonomous technology.
Market Dynamics and Competition
Uncertainty looms over Tesla’s ability to achieve its 2025 growth objectives, particularly with potential rollbacks of EV tax credits under the Trump administration. While critical of existing EV policies, Trump’s anticipated relaxation of regulations on self-driving cars could benefit Tesla’s autonomous vehicle aspirations.
Meanwhile, Chinese competitor BYD Co. sold 4.25 million passenger EV and plug-in hybrid models in 2024, closing the gap with Tesla as the leading electric vehicle manufacturer. Tesla’s combined Model 3 and Model Y sales reached 471,930 in the fourth quarter, while “other models,” including the Model X, S, and Cybertruck, saw 23,640 deliveries. The US and China remain Tesla’s primary markets.
Cybertruck Incident and Energy Business
A Cybertruck explosion outside a Trump hotel in Las Vegas, resulting in a fatality and injuries, drew significant attention. The FBI is investigating the incident and potential connections to another attack in New Orleans. Musk stated that Tesla attributed the blast to an issue in the truck bed, unrelated to the vehicle itself.
On a positive note, Tesla reported record annual growth in its energy business, deploying 31.4 gigawatt hours in 2024, including 11 gigawatt hours in the fourth quarter. This surpasses the 14.7 gigawatt hours deployed in all of 2023.
Tesla’s 2024 performance reveals a complex landscape for the EV industry, marked by both challenges and opportunities. The company’s future growth hinges on navigating evolving consumer demand, regulatory changes, and intensifying competition.
