Tesla reported its first decline in annual deliveries on Thursday, as attractive year-end incentives for the Elon Musk-led EV maker’s aging line up and new Cybertruck pickup failed to lure customers wary of higher borrowing costs. .
The company’s shares fell about 6%. Musk had previously predicted a “modest increase” in 2024 deliveries and offered a variety of promotions, including interest-free financing and free fast-charging, to boost sales.
But a decline in European subsidies, a shift toward lower-priced hybrid vehicles in the United States, and tough competition, especially from China’s BYD, hurt Tesla.
Morgan Stanley analysts said Tesla’s older models and greater availability of cheaper alternatives have affected the company’s increased promotional activities.
Amid the slowdown in EV demand, Musk has turned his attention to building a self-driving taxi business, which is expected to boost Tesla’s value.
He also supported President-elect Donald Trump with millions of dollars in campaign donations, and analysts expect easier regulations from the new administration to help Tesla in the long run.
But self-driving technology is still under development and years away from commercialization, with analysts saying Tesla will need to deliver on its promised cheaper versions of existing cars to achieve Musk’s goal of 20% to 30% sales growth. And the success of the Cybertruck will depend on that. 2025.
Famous for its futuristic design, the demand for this truck is showing signs of weakness.
Deliveries in 2024 totaled 1.79 million, down 1.1% from a year earlier and below estimates of 1.806 million units, according to 19 analysts surveyed by LSEG.
Tesla’s 2024 deliveries were ahead of rival BYD, which said sales of battery-electric vehicles would rise 12.1% to 1.76 million in 2023 on competitive pricing and strong traction in Asian and European markets.
Tesla shares are heading into 2024 on a strong note, with Musk rising more than 60% after Trump’s election with strong support.
Musk has said he plans to leverage his promised role as a government-efficiency czar under the Trump administration to advocate for a federal approval process for autonomous vehicles to replace current state-specific laws. planning, which he described as “incredibly painful” to navigate.
Tesla’s Autopilot and “Full Self-Driving” technologies, which are not yet fully autonomous, are under scrutiny due to lawsuits, US traffic safety regulatory investigations and a Justice Department criminal investigation.
The main concern is whether Tesla may have overstated the self-driving capabilities of its vehicles.
Tesla is also under pressure from old automakers. Its October registrations in Europe fell 24% due to stiff competition with Volkswagen Group, whose Skoda Enyaq SUV overtook Tesla’s Model Y as the best-selling EV in the region, according to data research firm JATO Dynamics.
Trump’s team is considering eliminating a $7,500 tax credit for consumer EV purchases, a move that could worsen the slow shift toward EVs in the US, Reuters reported in November.