Tesla Inc. reported a significant decline in vehicle deliveries for the first time in its history, as outlined in its fourth-quarter production and delivery report released on Thursday. The electric vehicle (EV) manufacturer delivered 495,570 vehicles in the last quarter of 2024, falling short of analysts' expectations of 504,770 units. This decline comes as Tesla's total annual deliveries for the year reached 1,789,226, a decrease from 1.81 million in 2023.
The company's fourth-quarter performance was marked by challenges in key markets. In China, where Tesla has faced increasing competition and regulatory scrutiny, the sales pressure was palpable. The vehicle registration numbers in Europe also reflected a downturn, sliding to 18,786 in November compared to approximately 31,810 during the same month last year. Consequently, Tesla experienced a steep drop in sales across the region in the fourth quarter.
To mitigate these challenges, Tesla implemented a series of incentives and price cuts, including reductions on its popular Model Y SUV. Despite this effort, sales in Europe failed to keep pace with the overall EV market growth, which rose by 8%. Notably, while Model Y sales increased by over 5% through November, the overall performance remained unsatisfactory.
Tesla's business in North America continued to show strength, but the company's overall production numbers demonstrated a struggle to maintain momentum. The total production for the year was reported at 1,773,443 units, which also marks a decline compared to previous years.
Amid these challenges, Tesla's stock faced a significant reaction from investors. Shares fell by as much as 7% during trading on Thursday following the report release.
Patrick George, editor-in-chief of InsideEVs, highlighted the operational hurdles faced by the company. He noted that the biggest challenge for Tesla in the latest quarter was "the nuts-and-bolts job of being a car company." Furthermore, he pointed out that vehicles were "piling up on used car lots," indicating potential overproduction and inventory issues that could dampen future sales.
In an effort to manage its production levels and avoid flooding the market with new vehicles, Tesla took measures such as sending Cybertruck assembly line workers home for a few days. This action suggests a strategic approach to balance supply with demand amid fluctuating market conditions.
The fourth-quarter results reflect a broader trend that has challenged Tesla throughout 2024. While the company has continued to innovate and expand its product line, including the anticipated Cybertruck, the realities of competition and market dynamics have posed significant obstacles.
As Tesla navigates this complex landscape, stakeholders will be closely watching how the company adapts to maintain its position as a leader in the EV market.
