Tesla reported a decrease in full-year auto sales on Thursday, failing to meet the company’s forecast in a sign of increasing competition in the electric vehicle market in China and other regions.
Elon Musk’s electric vehicle company reported 495,570 deliveries in the fourth quarter. This quarterly record was still below Wall Street’s expectations, and as a result, the year’s total sales came in at nearly 1.8 million vehicles.
Sales were approximately one percent lower than the 2023 total, despite Tesla stating in October that it anticipated a “slight growth” in vehicle deliveries for the year.
Besides rising competition from producers like China’s BYD and established automakers, analysts noted a slow ramp-up of production of the futuristic Cybertruck.
Shares of Tesla plummeted sharply following the announcement, erasing some of the company’s significant advances realized since the November 5 US presidential election.
The sales figure marks a mixed conclusion to 2024 for Tesla, a year during which Musk fully immersed himself in US electoral politics.
He played a significant role in helping Republican Donald Trump secure the presidency by making substantial donations and spreading anti-immigrant and other incendiary Trump rhetoric on his platform, formerly known as Twitter, which is now X.
Profits at Tesla for the first three quarters of 2024 dropped by 31 percent relative to the same period in 2023, resulting from measures to cut prices in response to a slowdown in customer demand.
Tesla considers the current sales slowdown to mark a transition point between two distinct phases of growth, with the upcoming surge in volume expected to be driven by advancements in autonomous technology and the release of novel vehicle models.
The company has had to meet the demand for new vehicles, with investors on Wall Street eagerly awaiting the introduction of a more affordable model. The current starting price for the Model 3 is approximately $30,000.
Investors welcomed an announcement in July that Musk plans a new, more affordable model by the first half of 2025, but the company has given only few details.
CFRA Research analyst Garrett Nelson noted that deliveries of the Cybertruck, which began arriving with customers in November 2023, were sluggish.
Tesla’s press release Thursday stated that sales for the vehicle were not disclosed, as they were included in the “other models” category. Reported deliveries within this segment amounted to 85,133 for the year.
Musk has previously described the production of the Cybertruck as being challenging, using the term robust to characterize demand for the vehicle. He indicated that he anticipates annual sales of 250,000 Cybertrucks in North America.
Today’s output appears to be significantly lower than the Cybertruck’s current production capacity, exceeding 125,000 units per year, as stated in official Tesla documentation.
“The ramp-up has been unsatisfactory,” said Nelson, noting that the figures raise doubts about the demand for the vehicle.
The Cybertruck, a massive and formidable-looking vehicle, has become Tesla’s most symbolic car, despite not being frequently seen on US roads.
Investigations were launched into a blast that occurred in front of the Trump hotel in Las Vegas on Wednesday, resulting in one fatality.
Autonomous push
Shares of Tesla rose more than 60 percent between the US presidential election on November 5, and the end of 2024, as the market was certain that the impact of Elon Musk’s influence with the incoming administration will boost Tesla initiatives in autonomous driving and artificial intelligence.
“The next step in Tesla’s broader strategic vision will begin with the autonomous and AI era, which will be accelerated under a Trump administration,” said analysts at Wedbush, who considered Tesla’s 2024 automobile sales a secondary concern compared to Tesla’s growth narrative.
Critics of Tesla highlight the advancements on the ground of Alphabet-owned Waymo, which currently offers robotaxi services in three US cities. A well-publicized October event in Los Angeles showcasing Tesla’s autonomous robotaxi vehicles generally garnered below-expectation reviews.
Bullish investors in Tesla point to the company’s advancements in driver-assistance technologies, which are generating data that they believe will ultimately enable full autonomy.
We still maintain a ‘buy’ recommendation for the stock,” said Nelson, who also predicts a resurgence in sales for next year. “The year 2025 will be a period of substantial progress in the development of the autonomous driving framework. This bodes well for the stock.
Shares of Tesla dropped 6.9 percent in mid-day trading.
