According to Reuters, Tesla won an accolade in 2024 – the first drop in annual electric vehicle deliveries in the company’s history.
After CEO Elon Musk predicted “slight growth” in 2024, Tesla’s 1.1% decline in annual deliveries sent the company’s shares down 6% on January 2, noted Reuters.
Why did Tesla live up to expectations? In a nutshell, car buyers have no responsibility to buy Electric vehicles from Tesla. For this to happen, the company wants to succeed over its competition, some of which saw solid growth in their shipments in 2024.
Different groups of buyers have their own reasons for buying Tesla EVs. For instance, early adopters put up with many technical problems, as I wrote in a July 2020 Forbes post, because they wanted the attention that comes with being the first to own an EV. They have mostly done their EV buying, analysts told the Associated Press.
By contrast, most mainstream buyers are less eager. They have “concerns about range, price and the ability to find charging stations on longer trips,” AP noted.
Between 2014 and 2023, Tesla’s annual shipments grew at 56. 7% of the average annual rate, according to my knowledge research through Reuters.
This raises questions for investors: Why did Tesla’s rapid growth shift into reverse? Can Tesla revenues speed up? If not, will Tesla stock — which soared 74% in 2024 — keep rising?
The short answers are: I see at least five reasons for the slowdown. Revenues can only resume if Tesla offers a compelling reason to buy versus competitors, and as long as Musk remains popular and powerful, Tesla’s stock could keep rising.
I have contacted Tesla for comment and will update this message if I have a response.
In 2024, Tesla’s EV deliveries declined, below investors’ expectations of around 1% growth.
Specifically, Tesla shipped 1. 79 million cars in 2024, 1. 1% less than 1. 81 million in 2023 and 16 million less than “1. 806 million joint estimates from 19 analysts surveyed across the London Stock Exchange group,” Reuters noted.
Here is my initial investigation of the five byqués:
Analysts are divided on whether or when Tesla can grow faster. “We have never viewed Tesla simply as a car company,” wrote Wedbush financial analyst Daniel Ives in a report featured by AP.
Tesla “stock should be valued more on its promise of creating fully self-driving, autonomous vehicles and its AI technology and is still worth buying despite the sales drop. 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,” Ives added.
Goldstein and Schuster suggest Tesla’s goal of 20% to 30% revenue growth in 2025 will not be achieved. After all, with Musk talking more about self-driving taxis — which are unlikely to hit the market in 2025 — Tesla could struggle to meet that goal.
Despite promises to sell a less expensive electric vehicle this year, Tesla didn’t do much to meet this expectation. Tesla said the company would “start selling a car in 2025 for as little as $25,000,” the New York Times claimed. However, Tesla did not provide a prototype and Musk did not provide many main points about the project, the Times noted.
Unless Tesla ramps up production of those models soon, it’s unclear how Tesla will achieve significant expansion this year.
Analysts view Tesla’s stock as overvalued. Based on 33 Wall Street analysts offering 12-month price targets, Tesla stock would need to drop about 28% to reach the average target of $292.03, notes TipRanks.
Here are 4 analyst reviews:
As long as Musk’s political power remains high, Tesla’s share price could rise. Otherwise, investors should watch out below.
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