Tesla posts a sales drop for the first time in 9 years

Tesla’s global annual sales fell for the first time in at least 9 years, new company data shows.

The company delivered 1.79 million vehicles for 2024, a drop of 1.1 per cent from its sales in 2023 as demand for electric vehicles in the US and elsewhere slowed.

The final part of the year saw the company increase sales by 2.3 per cent, but it wasn’t enough to overcome the overall loss in 2024.

The boost at the end of the year came at a cost, with US analysts expecting Tesla’s average sales price to fall to just over $41,000 in the quarter, the lowest in at least four years.

Falling sales early in the year led to once-unheard-of discounts for the automaker, cutting into its industry-leading profit margins.

Most of Tesla’s 2024 sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 23,640 of its more expensive models that include X and S, as well as the new Cybertruck.

Why aren’t customers buying Tesla?

One way to explain the slow Tesla sales is that buyers have concerns about the range, price and ability to find charging stations for the company’s electric vehicles (EVs), analysts say.

Another is competition from legacy and startup automakers, who are nibbling away at Tesla’s market share.

Back in 2022, Tesla predicted that its sales would grow by 50 per cent most years, but the prediction ran into an ageing model lineup and increased competition in China, Europe and the US.

Now, Tesla has to contend with the likes of China’s BYD, which announced on Thursday that total soared 41 per cent last year including 1.77 million EVs. While Tesla’s sales still edged BYD out last year, the company is still vying with Tesla to become the world’s top-selling EV maker.

US investors have also been pushing up Tesla stock since the outcome of the November election, on a bet that the incoming Trump administration will ease EV regulations and help Tesla move to self-driving AI vehicles.

William Stein, an analyst at Truist Securities, thinks Tesla will struggle to sell vehicles in future months and expects further discounting used to boost sales will weigh on its financial results.

Tesla stock still trending up in 2024

That loss in sales doesn’t necessarily translate to Tesla stock prices, which fell by nearly 7 per cent on Thursday but have gone up more than 50 per cent over the last 12 months after President-elect Donald Trump’s victory in the November US election.

Daniel Ives, a financial analyst at Wedbush, said he thinks the stock is still worth buying despite the sales drop.

“We have never viewed Tesla simply as a car company…instead we have always viewed Musk and Tesla as a leading disruptive technology global player,” said Ives in a report. “And the first part of this grand strategic vision has taken shape.”

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Tesla is expected to release its earnings for the fourth quarter of 2024 on January 29.