Tesla's First Annual Sales Decline in Nine Years

Tesla reported a 1.1% drop in global sales for 2024, marking its first annual decline in at least nine years. While the fourth quarter saw a 2.3% increase in deliveries (reaching 495,570 vehicles), this wasn't enough to offset a sluggish start to the year, despite incentives like 0% financing, free charging, and low-priced leases. Full-year deliveries totaled 1.79 million, down from 1.81 million in 2023. The fourth-quarter growth came at the cost of lower average selling prices, expected to fall below $41,000 – the lowest in at least four years. This doesn't bode well for Tesla's Q4 earnings. Tesla's previous prediction of 50% annual sales growth was hampered by an aging model lineup and intensified competition from China, Europe, and the U.S. Analysts suggest most early adopters of EVs in the U.S. already own them, while mainstream buyers remain concerned about range, price, and charging infrastructure. Fourth-quarter deliveries missed Wall Street expectations. Increased competition and the sales decline pose a challenge to investors who have driven up Tesla's stock price since the election, betting on the incoming Trump administration to ease EV regulations and support Tesla's autonomous driving ambitions.