Tesla on Thursday reported its first annual decline in sales in more than a dozen years, sending down a inventory that has climbed since Donald Trump’s victory, positive that CEO Elon Musk’s close dating with the president-elect will the company.
Global Tesla car sales rose 2. 3% last quarter thanks to zero financing, flexible charging and cheap rentals. But it wasn’t enough for billionaire Musk’s top-value inventory to triumph over a slow start to 2024.
The company, based in Austin, Texas, sold 495,570 vehicles from October through December, boosting deliveries to 1.79 million for the full year. But that was 1.1 per cent below 2023 sales of 1.81 million, as overall demand for electric vehicles in the United States and elsewhere slowed.
The year-on-year drop in global sales is Tesla’s first since 2011, according to figures from analytics corporation Global Data. The company sold 1,306 vehicles in 2010, but that number fell to 1,129 the following year.
The fourth-quarter push came at a cost. Analysts surveyed through data provider FactSet expected Tesla’s average ad value to fall to just over $41,000 in the quarter, the lowest in at least four years. This does not bode well for Tesla’s fourth quarter. -Quarterly results, which the company said it would announce on January 29. Tesla shares fell more than seven percent on Thursday.
Musk has donated more than $250 million to Trump’s re-election crusade and is a regular guest at the president-elect’s Mar-a-Lago hotel in Florida.
Tesla investors have pushed the stock up more than 50 per cent since November’s election on hopes the new administration will streamline electric vehicle regulations and address other Musk policy priorities.
In 2022, Tesla predicted that its sales would grow by 50 per cent most years, but the prediction ran into an aging model lineup and increased competition in China, Europe and the U.S.
In the United States, analysts say most early adopters of this generation already own electric vehicles, and more classic buyers are concerned about range, price and the ability to charge stations for longer trips.
Fourth-quarter deliveries missed Wall Street estimates. Analysts surveyed via FactSet forecast sales of 498,000 vehicles.
The company made headlines this week when a Cybertruck, one of its signature models, caught fire and exploded outside a Trump hotel in Las Vegas. Fireworks mortars and full camping fuel cans were discovered in the back of the vehicle, according to authorities, and Musk said in a post that they had no relation to the Cybertruck itself.
1 dead after Tesla Cybertruck explodes outside Trump hotel in Las Vegas
Falling sales earlier this year led to never-before-seen cuts for the automaker, reducing its profit margins, one of the most productive in the industry. Competition from existing automakers and startups is also intensifying as they try to eat into Tesla’s market share.
Daniel Ives, a financial analyst at Wedbush Securities, said he thinks the stock is still worth buying despite the sales drop.
“We have never seen Tesla simply as an automaker. . . instead, we have seen Musk and Tesla as a leading global player in disruptive technology,” Ives wrote in a memo to clients. “And the first component of this grand strategic vision has taken shape. “
The fourth-quarter sales, while a record for Tesla, show that the company’s aging model lineup is achieving saturation in the entry-level luxury vehicle market, said Seth Goldstein, an analyst at financial company Morningstar.
Almost all of Tesla’s sales came from the smaller, less expensive Model 3 and Model Y, and the company sold just 23,640 of its most expensive models, adding the X and S, as well as the new Cybertruck.
Aside from the Cybertruck, which has appeal, Tesla’s newest mainstream style is the Y, a small SUV that first went on sale in 2020.
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