After a strong 2024, Tesla is facing a sobering new year's hangover.
Last year marked a major comeback for Tesla and its chief executive, Elon Musk, who ascended to the president-elect’s inner circle and unveiled his flashy magnum opus. But it turns out that under the hood, Tesla’s key metric—car deliveries—was lagging behind.
Tesla announced its first-ever annual sales decline today. The EV maker sold 1.79 million vehicles in 2024, below the 1.8 million sold in 2023. That’s including its record fourth-quarter sales of 495,570 vehicles, up from the 484,507 sold in the fourth quarter of 2023.
The stock sank over 6% on the news. Today's drop follows a 63% gain for the carmaker over 2024, most of which took place in the fourth quarter of the year.
In other bad news: A Cybertruck filled with gas canisters and fireworks mortars exploded outside the Trump hotel in Las Vegas, killing one person and injuring others. The FBI is investigating the incident as a potential act of terrorism, and although the vehicle itself was not the cause of the explosion, pictures of the Cybertruck engulfed in flames have not helped Tesla’s stock today.
The EV race revs up
Tesla was once the unchallenged king of the EV market, and still accounts for almost half of all EVs sold in the US. But today’s numbers are just more evidence that competitors such as General Motors, BMW, and China’s BYD are cutting Tesla’s lead.
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Just yesterday, BYD reported stellar deliveries for the last year. The company delivered 1.76 million EVs in 2024, outpacing its 1.6 million deliveries in 2023. Its fourth-quarter sales of 595,000 vehicles beat Tesla’s sales in the same period, marking the second quarter in a row where BYD dethroned the EV king.
Sales growth for EVs is slowing at large, making the battle for narrow market share even more cutthroat. But Musk and his most loyal followers investors have always been more captivated by flashy new tech instead of boring old sales metrics.
Wedbush analyst and Tesla bull Dan Ives essentially shrugged off the poor numbers and maintained his outperform rating in a note today, choosing to focus on the big picture. “Taking a step back, over the last decade we have never viewed Tesla simply as a car company...instead we have always viewed Musk and Tesla as a leading disruptive technology global player, and the first part of this grand strategic vision has taken shape over the past 5 years,” Ives wrote. “We believe Tesla remains the most undervalued AI play in the market today,” he added.
Seems like one way to play off poor EV sales is to hope investors forget about the “vehicle” part altogether.—LB