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Tesla’s annual vehicle deliveries declined for the first time in more than a decade as the world’s largest electric vehicle maker came under pressure from Chinese competition.
Shares fell 5 per cent on Thursday as the figures raised questions about a sharp rebound in sales that its chief executive Elon Musk had forecast.
For the whole year, Tesla delivered 1.79mn vehicles, just below the 1.81mn delivered in 2023 and the first annual drop since 2011, according to Bloomberg data.
On a quarterly basis, the company said on Thursday that it delivered 495,570 vehicles, up 2.3 per cent from the same quarter a year earlier but falling below market expectations for more than 500,000.
Despite the annual decline, Tesla still retained its position as the world’s biggest EV maker while facing fierce competition from Chinese rival BYD, which reported earlier on Thursday that it sold 1.76mn pure EVs in 2024. BYD said it sold a record 4.3mn EVs and hybrids overall, a company record, despite intensifying pressure from rivals in its home market.
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Investors had expected a strong fourth quarter for Tesla on the back of cost cuts and discounts on existing vehicles to spur consumer demand.
In October, Tesla reported a higher-than-expected quarterly profit and forecast “slight growth” in deliveries for 2024, while Musk forecast that the group’s vehicle sales could increase between 20 and 30 per cent in 2025.
Competition with the cheaper offerings from Chinese rivals and concerns about slowing growth in EV sales, however, have weighed down on the market over the past year.
Tesla has also been caught up in the political activism of its chief executive. Musk spent more than $250mn to back Donald Trump’s successful election campaign and has become one of the president-elect’s closest advisers. Trump tasked Musk with co-leading a new Department of Government Efficiency aimed at finding ways to slash US federal spending.
Tesla shares have rocketed higher since the November election as investors saw the benefits of Musk’s close relationship with Trump. But the company also faces political uncertainty with California’s Democratic governor, Gavin Newsom, indicating that Tesla could miss out on lucrative tax rebates that the state is considering for EVs.
With its complex supply chain and close business ties in China, Tesla is also unlikely to avoid the effects of wide-ranging tariffs that Trump has threatened against goods imported to the US.
While increasing his political clout, Musk has also made a strategic pivot towards autonomous driving, artificial intelligence and robotics, forecasting that these technologies would soon be Tesla’s main revenue sources and drive up its valuation.
The company aims to start producing its self-driving Cybercab before the start of 2027. The model would cost roughly $25,000, when government electric vehicle incentives are deducted.
In October, Musk confirmed that Tesla was not developing a much-anticipated affordable $25,000 Model 2. The company told investors in December that it would launch a new model in the first half that would be priced below $30,000 including subsidies or $37,499 without them.
