Tesla sales drop by 1.1% for 2024, first annual decline in nine years

Tesla experienced its first global annual sales decline in at least nine years, as a 2.3% increase in the fourth quarter failed to offset a slow start to 2024, despite enticing offers such as 0% financing, free charging, and low-cost leases.

The Austin, Texas-based company delivered 495,570 vehicles between October and December, bringing total annual deliveries to 1.79 million. However, this figure marked a 1.1% decrease from the 1.81 million vehicles sold in 2023, as demand for electric vehicles (EVs) softened in the U.S. and other markets.

Tesla’s fourth-quarter boost came at a price. Analysts surveyed by FactSet estimated the company’s average sales price fell to just over $41,000 during the quarter—the lowest in at least four years. This downward trend could negatively impact Tesla’s fourth-quarter earnings, scheduled for release on Jan. 29.

In 2022, Tesla projected annual sales growth of 50% for most years. However, that target has been challenged by an aging vehicle lineup and increasing competition in key markets such as China, Europe, and the U.S. In America, analysts suggest that many early adopters of EV technology have already purchased vehicles, leaving more cautious mainstream buyers concerned about factors like range, price, and access to charging stations during long trips.

Fourth-quarter deliveries also fell short of Wall Street expectations, with analysts polled by FactSet forecasting sales of 498,000 vehicles.

Tesla shares dropped nearly 7% on Thursday, though they remain up over 50% over the past 12 months, bolstered by optimism surrounding Donald Trump’s election victory.

ALSO READ: Youth coalition lauds Akume’s leadership

Sluggish sales early in 2024 prompted Tesla to introduce unprecedented discounts, cutting into its industry-leading profit margins. Meanwhile, competition from both established automakers and startups continues to grow, chipping away at Tesla’s market share.

The sales decline tests the confidence of investors, who have driven Tesla’s stock higher in anticipation of relaxed EV regulations under the Trump administration and the company’s advancements toward fully autonomous vehicles powered by artificial intelligence.

Daniel Ives, an analyst at Wedbush, remains optimistic about Tesla’s long-term prospects. “We have never viewed Tesla simply as a car company,” Ives said in a report. “Instead, we have always seen Musk and Tesla as a leading disruptive technology global player. The first part of this grand strategic vision has taken shape.”

However, William Stein, an analyst at Truist Securities, expressed a more cautious outlook. He anticipates challenges in maintaining vehicle sales in the coming months and warns that continued discounting could strain Tesla’s financial performance.

Most of Tesla’s 2024 sales came from its smaller, more affordable Models 3 and Y, with just 23,640 units sold from its premium lineup, which includes Models X and S, as well as the new Cybertruck.

Tesla narrowly edged out Chinese competitor BYD for the title of the world’s top EV seller. BYD reported a 41% surge in sales last year, including 1.77 million EVs.

In the fourth quarter, Tesla produced 459,445 vehicles, slightly fewer than it delivered. For the full year, production totaled 1.77 million vehicles, trailing annual sales figures.

NIGERIAN TRIBUNE