Tesla (TSLA.O) has recorded its first decline in annual vehicle deliveries, falling short of expectations despite aggressive year-end incentives designed to boost sales. The company’s efforts, which included interest-free financing and complimentary fast-charging offers, struggled to attract customers, who remain cautious amid rising borrowing costs.
The electric vehicle manufacturer, led by Elon Musk, had anticipated modest growth for its 2024 deliveries. However, with total deliveries dropping by 1.1% year-over-year, Tesla faces mounting pressure from multiple factors, including increased competition, a shift toward hybrid vehicles in key markets, and reduced government subsidies in Europe.
Tesla’s share price tumbled nearly 6% following the news, marking a stark contrast to the rally it experienced following the election of former President Donald Trump.
The company’s lineup, which includes the aging models of its electric vehicles as well as the newly launched Cybertruck, could not overcome these challenges. In addition to the external pressures, the growing presence of rivals, particularly China’s BYD (002594.SZ), has intensified competition in the EV market.
Analyst Seth Goldstein from Morningstar pointed out that the decline in deliveries may also hinder Tesla’s broader growth strategy. “Fewer vehicle sales translate to a smaller potential market for Tesla’s auxiliary services such as autonomous driving software, charging infrastructure, and insurance products,” Goldstein noted in his analysis.
The dip in deliveries signals a potentially tough road ahead for Tesla as it navigates a shifting automotive landscape and escalating global competition in the electric vehicle sector.
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