Jamie Spencer
Tesla released its fourth-quarter and annual vehicle production and delivery figures for 2024 on Thursday, revealing the company’s first year-over-year decline in deliveries. While Tesla remains a dominant force in the electric vehicle (EV) market, it faces mounting competition, operational challenges, and the impact of CEO Elon Musk’s foray into politics.
Fourth-Quarter and Annual Delivery Highlights
Tesla reported 495,570 deliveries in the fourth quarter of 2024, slightly below analysts’ expectations of around 505,000. Total production for the quarter stood at 459,445 vehicles.
For the year, Tesla delivered 1,789,226 vehicles, down from 1.81 million in 2023. Annual production reached 1,773,443 vehicles.
Tesla’s shares fell as much as 7% in Thursday trading following the report, which underperformed forecasts and marked a slowdown in the company’s rapid delivery growth.
Tesla’s Growing Competition
Tesla has long dominated the EV market, but competition has intensified. Rivals like General Motors, Ford, and Rivian in the U.S., BYD in China, and European automakers BMW and Volkswagen are rapidly gaining market share.
Patrick George, editor-in-chief of InsideEVs, commented on Tesla’s operational challenges:
“Tesla’s biggest operational challenge in the latest quarter was the nuts-and-bolts job of being a car company.”
In Europe, Tesla saw a sharp decline in sales, with vehicle registrations falling 14% year-over-year through November. Meanwhile, BYD and other Chinese brands, including Chery and Li Auto, grew significantly faster than Tesla in the competitive Chinese market.
Cybertruck Challenges and Inventory Build-Up
Tesla’s highly anticipated Cybertruck faced mixed reception. While the angular steel design generated buzz, reports suggest that Cybertrucks are piling up on used car lots. Tesla also paused assembly line work for a few days during the fourth quarter, signaling a possible attempt to manage inventory levels.
“Tesla made a mistake not bringing more affordable EVs in 2024,” George noted, referencing the Cybertruck’s high starting price of $80,000.
Musk’s Political Involvement
Elon Musk’s role in President-elect Donald Trump’s campaign drew attention in the latter half of 2024. Musk reportedly contributed $277 million to support Trump and Republican candidates and has been tapped to co-lead a Trump administration advisory group on federal spending and regulations.
Industry analysts suggest Musk’s political activities may have distracted from Tesla’s core business. Sam Fiorani, vice president at AutoForecast Solutions, remarked:
“Musk’s foray into politics may have pulled his focus away from his core businesses.”
Looking Ahead: 2025 Prospects
Tesla faces a challenging road ahead but has outlined ambitious plans for 2025, including the introduction of lower-cost and autonomous vehicles. Musk indicated on an earnings call that the company expects “20% to 30% growth” in 2025.
Price cuts and incentives, particularly for the Model Y SUV, have helped Tesla maintain dominance in North America. However, growing inventory levels and increasing competition may temper growth expectations.
Tesla’s first annual decline in deliveries underscores the evolving dynamics of the global EV market. As competition intensifies and operational hurdles persist, the company must balance innovation and affordability to sustain growth. With ambitious plans for 2025, Tesla aims to solidify its position while navigating the challenges of a rapidly shifting industry.
