Tesla misses expectations of EV delivery in the fourth quarter

Tesla reported a record fourth-quarter delivery number but fell short of market expectations, resulting in a 6% decline in its share price on Thursday.

The company’s full-year delivery figure marked its first-ever annual decline, underscoring the challenges electric vehicle (EV) manufacturers face amid a slowdown in global consumer demand. 

The first annual decline in delivery

Tesla announced a quarterly delivery figure of 495,570 vehicles and deployment of 11.0 gigawatt hours (GWh) of energy storage products in the final quarter of 2024, both record highs.

According to Tesla’s website, the Model 3 and Model Y accounted for 471,930 deliveries, with production reaching 436,718 units. Other models, including the Model X, Model S, and Cybertruck, saw combined deliveries of 23,640 units.

However, the delivery figures fell short of analysts’ projections, which had anticipated more than 510,000 units.

The full-year delivery totalled 1,789,226 vehicles, reflecting the first annual decline on record, down from 1.81 million in 2023.

Tesla has forecast “slight growth” in vehicle deliveries for 2024, while CEO Elon Musk expects automotive deliveries to grow by 20%–30% in 2025.

The company’s full-year energy storage deployment reached 31.4 GWh, more than double the figure in 2023, aligning with its expectations.

Despite the disappointing delivery results, investors are expected to focus on Tesla’s revenue growth trajectory and profit margins when the company reports its fourth-quarter earnings on 29 January.

In its third-quarter earnings call, Tesla highlighted that Cybertruck production had achieved a positive gross margin for the first time. Its energy business revenue grew by 52% annually, achieving a record gross margin.

The company also reiterated plans to introduce affordable EVs, with production slated to begin in the first half of 2025 and volume anticipated to grow by 50%.

The Trump rally

Tesla’s stock rose 63% in the US markets last year, despite a year-end decline. The share price reached an all-time high of $489 (€502) on 18 December, nearly doubling since former US President Donald Trump won the election on 5 November.

Investors have expected Tesla will receive favourable treatment from the Trump Administration, given CEO Elon Musk’s backing of Trump in his election campaign. 

In November, Bloomberg reported that President-elect Donald Trump’s transition team plans to prioritise establishing a new federal framework for self-driving car regulation at the Transportation Department, potentially relaxing rules for autonomous vehicles.

This news sparked optimism toward Tesla’s ambitious Robotaxi business, seen as a critical component of the company’s growth strategy. 

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Although Trump’s administration may remove subsidies for EVs in the US, potentially impacting Tesla’s profit margins, this could pose greater challenges for its competitors.

Ironically, the withdrawal of government support might benefit Tesla relative to its rivals.

However, such assumptions hinge on the actual implementation of these policies, leaving Tesla shares susceptible to speculative hype.

Challenges from Chinese rivals

In addition to weakened demand in EV markets, Tesla faces intensifying competition from Chinese automakers.

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The largest Chinese brand, BYD, reported full-year deliveries of 4.3 million passenger vehicles in 2024, including 2.5 million hybrids and 1.76 million pure EVs.

Tesla implemented discounts and other incentives to compete in the Chinese market earlier in 2024. However, these measures significantly squeezed its profit margins.