Tesla annual deliveries fall for first time as incentives fail to drum up demand
Tesla reported its first fall in yearly deliveries on Thursday as lucrative year-end incentives for the Elon Musk-led EV maker’s aging line up and the new Cybertruck pickup failed to lure customers wary of high borrowing costs.
Shares of the company fell about 6%. Musk had earlier predicted “slight growth” in 2024 deliveries and offered a range of promotions including interest-free financing and free fast-charging to boost sales.
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But reduced European subsidies, a shift in the United States toward lower-priced hybrid vehicles and tougher competition especially from China’s BYD hurt Tesla.
Analysts at Morgan Stanley said Tesla’s aging models and higher availability of cheaper alternatives overshadowed the company’s increased promotional activities.
Amid the slowdown in demand for EVs, Musk has pivoted his focus on building a self-driving taxi business that is expected to boost Tesla’s value.
He also backed President-elect Donald Trump with millions of dollars in campaign donations and analysts expect easier regulations from the new administration to help Tesla in the long run.
But with self-driving technology still under development and years away from commercialization, analysts have said Tesla would have to rely on its promised cheaper versions of current cars and the success of Cybertruck to achieve Musk’s target of 20% to 30% sales growth in 2025.
The truck, known for its futuristic design, has been showing signs of weakness in demand.
Tesla is yet to disclose the delivery numbers for its Cybertruck. The company said on Thursday it handed over 471,930 Model 3 and Model Y vehicles and 23,640 units of other models, including the Model S sedan, Cybertruck and Model X premium SUV.
Overall, Tesla handed over 495,570 vehicles in the three months to Dec. 31, missing estimates of 503,269 units, according to 15 analysts polled by LSEG. It produced 459,445 vehicles in the period, down about 7% from a year ago.
Deliveries for 2024 totaled 1.79 million, 1.1% lower than a year ago and below estimates of 1.806 million units, according to 19 analysts polled by LSEG.
