Tesla Reports First Annual Delivery Decline in Nine Years Amid Stiff Competition and Demand Slowdown

Tesla has reported a 1.1% drop in yearly vehicle deliveries for 2024, marking its first annual decline in nearly a decade, with 1.79 million units sold, below analysts’ estimates of 1.806 million. Despite offering lucrative year-end incentives like interest-free financing and free fast-charging, the EV maker struggled to counter reduced European subsidies, growing competition from Chinese rival BYD, and a shift in the U.S. market toward lower-priced hybrid vehicles. Tesla shares fell by 6% following the announcement, highlighting investor concerns over the company’s ability to sustain growth.
Adding to Tesla’s challenges is the lukewarm reception of its new Cybertruck, which has yet to disclose specific delivery numbers. While the futuristic design attracted attention, demand appears weaker than expected, with total Q4 deliveries reaching 495,570 units, missing market estimates of 503,269. Analysts at Morgan Stanley noted that Tesla’s aging lineup and the availability of cheaper alternatives overshadowed its promotional efforts. CEO Elon Musk has shifted focus to developing self-driving taxi technology, though this remains years away from commercialization, leaving Tesla reliant on its current models and the Cybertruck for growth.
The EV giant faces increasing pressure from legacy automakers and potential regulatory changes under the Trump administration. October registrations in Europe fell 24%, with Volkswagen’s Skoda Enyaq SUV surpassing Tesla’s Model Y as the best-selling EV. Meanwhile, uncertainties loom over the federal EV tax credit, with potential elimination in 2025, which could further dampen demand. Despite a strong 2024 for Tesla shares, up 60% after Trump’s election, analysts warn that the company’s path to achieving its ambitious 2025 growth targets hinges on overcoming these hurdles.
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