DETROIT (AP) — Tesla experienced a rare decline in global annual sales for the first time in at least nine years, as highlighted in the latest financial reports. Despite a modest 2.3% increase in sales during the final quarter of the year, the electric car company faced challenges in 2024 stemming from a slow start that even enticing offers such as 0% financing, free charging, and affordable leases could not fully offset.
During the period from October to December, Tesla, headquartered in Austin, Texas, delivered a total of 495,570 vehicles, contributing to a yearly total of 1.79 million units. However, this figure represented a 1.1% decrease compared to the previous year’s sales of 1.81 million, reflecting a broader trend of reduced demand for electric vehicles both in the United States and globally.
The upturn in sales observed in the fourth quarter came at a price, with analysts projecting a drop in Tesla’s average sales price to slightly over $41,000 for the quarter, marking the lowest point in at least four years. This downward trend in pricing raises concerns about the company’s fourth-quarter earnings, set to be disclosed on January 29.
Tesla’s optimistic forecast in 2022 of achieving a 50% growth in sales annually faced obstacles due to factors such as an aging product lineup and intensifying competition in key markets like China, Europe, and the United States. Particularly in the U.S., analysts noted that early adopters of electric vehicle technology were already saturated, while mainstream consumers harbored reservations regarding aspects like range, pricing, and the availability of charging infrastructure for longer journeys.
Notably, Tesla’s fourth-quarter deliveries fell short of expectations on Wall Street, where analysts anticipated sales of 498,000 vehicles. Following this revelation, Tesla’s stock experienced a nearly 7% decline on Thursday, though it had surged by more than 50% over the past 12 months, coinciding with the electoral victory of Donald Trump.
The decline in sales earlier in the year forced Tesla to introduce unprecedented discounts, eroding its historically strong profit margins and facing heightened competition from both traditional automakers and emerging startups aiming to encroach on its market share.
The recent sales dip serves as a litmus test for investors who have been bullish on Tesla’s prospects post-election, speculating that the incoming Trump administration would ease regulations on electric vehicles and support Tesla’s endeavors in developing fully autonomous vehicles driven by artificial intelligence.
Offering a contrasting perspective, financial analyst Daniel Ives of Wedbush maintained a positive outlook on Tesla’s stock despite the sales setback, emphasizing Tesla’s role as a disruptive force in the global technology landscape rather than merely a conventional car manufacturer. Ives underscored the fruition of Tesla CEO Elon Musk’s strategic vision, noting the progress made in the initial phase.
Conversely, William Stein, an analyst at Truist Securities, expressed concerns about Tesla’s future sales prospects, anticipating continued discounting strategies
