Tesla’s global vehicle deliveries bounced back in the third quarter of 2024, alleviating concerns on Wall Street about the company’s growth trajectory. Between July and September, Tesla delivered 462,890 vehicles, a 6.4% increase compared to the same period last year. The uptick was in line with analysts’ expectations, partly driven by robust demand in China and attractive financing deals offered to counter high global interest rates.
Despite this recovery, Tesla’s overall performance in the first nine months of 2024 still lags behind the previous year. The electric vehicle (EV) giant must deliver an estimated 515,000 vehicles in the fourth quarter to surpass 2023’s total of 1.81 million vehicles—significantly more than analysts’ forecasts of 485,000. This mounting pressure is reflected in the company’s stock, which dropped 3.5% following the release of the delivery data.
The EV startup’s rebound in Q3 comes after a rocky start to the year. The company posted its first year-over-year decline in deliveries in the first quarter, followed by a 6.5% drop in the first half of 2024. Much of this decline can be attributed to a pullback in demand for Tesla’s models, many of which have not seen significant redesigns in recent years.
The company is also contending with increasing competition in the EV market. Rival automakers are flooding the market with new electric models, many of which come with deep discounts due to unsold inventory. In the broader U.S. auto market, overall sales declined in the third quarter due to high vehicle prices and affordability challenges, while competitors like Stellantis saw U.S. sales drop by 20%.
To combat waning demand, Tesla has turned to frequent price cuts and financing offers, including interest rates as low as 0.99% on some purchases. While these promotions have boosted short-term sales, they have also reduced Tesla’s profit margins and impacted its revenue.
Tesla CEO Elon Musk has been working to shift investor focus to the company’s long-term ventures in artificial intelligence and robotics. On October 10, Tesla is expected to unveil a prototype of a fully autonomous robotaxi and provide updates on its ride-hailing service. Elon Musk has also highlighted Tesla’s ongoing investments in AI, including its Dojo supercomputer and the development of its Optimus humanoid robot, which the company’s core automotive business funds.
Tesla’s new Cybertruck, first delivered in late 2023, has garnered attention but remains limited in scope. The current model starts at around $100,000, restricting its appeal to higher-end buyers. Investors are eagerly awaiting news on a more affordable $25,000 model, which Musk has hinted will be revealed at the upcoming robotaxi event.
As the year concludes, investors and the industry alike will closely watch Tesla’s ability to deliver due to increased competition, economic pressures, and evolving consumer preferences.
