Tesla’s shares plummeted after the automaker posted its fourth-quarter and year-end vehicle production and deliveries. The results fell short of expectations and were the brand’s first annual drop in delivery numbers.
Tesla produced 459,445 vehicles in Q4 and delivered 495,570 cars in Q4. The automaker produced 1,773,443 units in 2024 and delivered 1,789,226. In comparison, Tesla closed out 2023 with 1.81 million annual deliveries and sold 484,507 in Q4 of 2023.
These numbers fell short of expectations, with analysts previously projecting Tesla to deliver 504,770 vehicles in Q4. After the report was released, the automaker’s shares fell by 7% on Thursday, losing some post-election gains and effectively stopping the short-lived rally that started in mid-December, whichTesla’s shares climbed to an all-time high, closing out at $424.77, surpassing its previous peak in 2021.
Tesla used to dominate the electric vehicle(EV) market, but now it’s facing fierce competition from other key markets. The first challenge was in Europe, where the automaker experienced a steep drop in sales. It delivered 283,000 vehicles through November, reflecting a 14% decline year over year.
In addition, Tesla struggled in China, facing even more fierce competition. Despite the growth of Model Y by 5%, the country’s EV market exploded by 8%. Domestic rivals such as BYD, Cheri, and Li Auto gobbled up market share, growing much more rapidly than Tesla.
Despite the bitter battles in the European and Chinese markets, Tesla maintained its dominance in North America, driving sales through incentives and price cuts. However, a ballooning inventory of unsold vehicles suggests a slowdown in consumer demand or market saturation. To regain control, Tesla has temporarily paused Cybertruck production to realign supply with consumer demand.
Tesla’s CEO, Elon Musk, confirmed that the automaker will introduce lower-cost vehicles in 2025, boosting the automaker’s growth by 20 to 30%. While the shift to more affordable vehicles could help Tesla maintain its dominance in the EV space, rival brands may provide quite a challenge.
