Tesla’s annual deliveries fell for the very first time since years. Its share price dropped by over 6% during early trading.
The stock was still down at 3.61% by 9:57am.
Analysts expected 504,770 deliveries, but the company only reported 495.570.
The company has seen its first drop in annual deliveries in many years.
Tesla will produce 1.77 millions vehicles annually by 2024, based on the Q4 production of 459.445 cars.
Tesla delivery numbers miss estimates
StreetAccount surveyed analysts who had expected higher Q4 deliveries, with a collective consensus of 504,770 cars, largely due to strong expectations regarding Tesla’s Model 3 and Model Y.
Independent Tesla researcher Troy Teslike predicted 501,000 deliveries.
Tesla reported numbers showed a deficit, indicating softer than expected demand, despite price reductions and incentives for buyers.
Tesla Stock faces an unpredictable year
Tesla’s shares had a rollercoaster ride in 2024. By year’s end, the stock had risen 63%, after a plunge of 29% in its first quarter. This was its worst performance quarterly since 2022.
Tesla’s shares reached a new record in the late year rally, but challenges like declining deliveries, price pressure and Elon Musk’s political involvement raised concerns about its focus.
Does Musk’s involvement in politics distract him?
Elon Musk’s involvement with Donald Trump’s campaign for president, which included a $277 million contribution to Republican candidates in the election, was a major talking point by 2024.
Musk’s role as coleader of Trump’s advisory group, tasked to cut federal spending and regulates, sparked concern that his new political venture might distract him away from Tesla’s main operations.
Sam Fiorani, Vice President of Auto Forecast Solutions told CNBC Musk’s decision to enter politics “could have pulled his focus from his core business”, though this impact might not show up in Q1 2025.
Chinese and European automakers are increasing competition with Tesla
Tesla’s dominant position in the EV sector will be challenged in 2024 by competitors such as BYD Ford and Hyundai.
Tesla sales in Europe fell 14% from November 2023 through November 2024. Registrations in November 2024 dropped from 31,810 registrations in 2023 down to 18,786 registrations in 2024, as European automakers BMW and Volkswagen stepped up their game.
Model Y Sales in China grew just 5%, despite the 8% market growth.
BYD, Chery, Li Auto and Jetour are among the Chinese brands that have outpaced Tesla in terms of growth.
BYD is also expanding rapidly by setting up manufacturing facilities outside of China and increasing its exports.
Patrick George, the editor-in-chief of InsideEVs told CNBC he believes Tesla is still better at many things than other EV makers, particularly when it comes its charging network.
Tesla’s greatest operational challenge was the “nuts-and-bolts” of running a car business.
Inventory buildup and Cybertruck Challenges
Tesla’s production problems and increasing inventory have posed challenges to the much-anticipated Cybertruck. It is expected to debut in 2024.
Workers at the Cybertruck assembly lines were sent temporarily home in Q4 to avoid oversupply.
George stated that Tesla had made a big mistake by not bringing in “more affordable EVs” for 2024, and that Cybertrucks were “piling on used car lot.”
Cybertruck’s angular steel Cybertruck is priced at $80,000.
Tesla: A new era of innovation
Tesla has maintained its dominance on the North American market despite challenges from abroad.
Sales of the Model Y SUV were boosted by aggressive price reductions and incentives.
These measures, however, came with a cost: thinner margins as well as an increase in unsold stock.
Tesla aims at launching lower-cost, autonomous EVs by 2025 in an effort to regain its momentum.
Musk predicted a 20%-30% increase in 2024 due to the advancement of autonomous technology, and an increased production rate for affordable cars.
Tesla is still a leading innovator in EVs, but growing competition, operational issues, and distractions from outside could affect the trajectory of the company in years to come.
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