Tesla’s fourth-quarter production and delivery report revealed its first annual decline, with 1,789,226 vehicles delivered in 2024, compared to 1.81 million in 2023. The company delivered 495,570 vehicles in Q4 2024, short of analysts’ expectations of over 500,000.

Tesla’s stock fell 7% Thursday despite a 63% year-end rally, reaching record highs in December. Earlier in 2024, Tesla faced challenges with sales declines, even after implementing price cuts and incentives. CEO Elon Musk had anticipated slower growth compared to the 38% increase in 2023.

Amid the sales slump, Musk’s focus shifted to politics, with significant contributions to President-elect Donald Trump’s campaign and a new advisory role in his administration. Analysts noted this may have impacted Musk’s attention to Tesla operations.

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Along with Tesla, his other ventures include the social media app, X, and SpaceX.

Tesla faces mounting competition from domestic and global automakers, including BYD, Ford, and Volkswagen. In Europe, Tesla’s sales dropped 14% year-over-year through November, with November registrations falling to 18,786 from 31,810 in 2023. Similarly, in China, where the Model Y remains a top seller, Tesla’s growth lagged behind the broader EV market.

Despite challenges, Tesla remains dominant in North America, offering price cuts and incentives to boost sales. However, inventory buildup, including unsold Cybertrucks, has raised concerns. The angular truck, starting at $80,000, has seen slower-than-expected adoption.

Looking ahead, Tesla plans to introduce lower-cost autonomous vehicles in 2025, with Musk projecting 20% to 30% growth. While Tesla diversifies into robotics and chip development, most profits continue to depend on vehicle sales.