Tesla Reports First Annual Decline in Deliveries, Shares Fall
Tesla, the electric vehicle (EV) maker led by Elon Musk, reported its first annual decline in deliveries on Thursday, citing lower sales and tougher competition. The company delivered 1.79 million vehicles in 2024, a 1.1% decline from the previous year and below estimates.
The decline in deliveries was attributed to lucrative year-end incentives for Tesla’s aging lineup and the new Cybertruck pickup failing to lure customers who are wary of high borrowing costs. The company also faced reduced European subsidies and a shift in the US towards lower-priced hybrid vehicles.
Tesla’s shares fell about 6% following the announcement, and analysts have warned that the decline in deliveries could reduce the company’s growth and lower its total addressable market for ancillary services such as autonomous driving software, charging, and insurance.
The company’s focus on building a self-driving taxi business, which is expected to boost its value, may not be enough to achieve its target of 20% to 30% sales growth in 2025. Tesla is also relying on its promised cheaper versions of current cars and the success of the Cybertruck to drive sales growth.
The Cybertruck, known for its futuristic design, has been showing signs of weakness in demand, and Tesla has yet to disclose the delivery numbers for the truck. The company delivered 471,930 Model 3 and Model Y vehicles and 23,640 units of other models, including the Model S sedan, Cybertruck, and Model X premium SUV, in the three months to December 31.
Tesla’s deliveries for 2024 were ahead of those of BYD, a Chinese EV maker, which reported a 12.1% rise in sales of battery-electric vehicles to 1.76 million in 2024.
