Tesla annual deliveries fall for first time as competition hurts demand

Bengaluru: So, Tesla just reported its first-ever drop in annual deliveries. They handed over fewer electric vehicles than expected in the last quarter, and it seems like their older models aren’t pulling in buyers like they used to.

Investors are a bit jittery, with shares dropping nearly 6%. Elon Musk had hoped that some promotions, like zero-interest financing, would help boost deliveries in 2024, but it looks like that’s not happening.

The competition is heating up, especially with companies like BYD from China making waves. Plus, there are fewer subsidies in Europe and a shift in the U.S. towards more affordable hybrid cars.

Musk is trying to pivot Tesla towards self-driving taxis and has even backed Trump with campaign donations, hoping for some regulatory relief. In the last quarter, they delivered about 495,570 vehicles, which was below what analysts expected.

For the whole year, they managed 1.79 million deliveries, which is a slight dip from last year. Meanwhile, BYD reported a 12.1% increase in sales, showing that they’re really gaining ground.

Analysts are saying that Tesla’s older models and the rise of cheaper alternatives are overshadowing any promotional efforts. With self-driving tech still a few years away, they might need to focus on cheaper versions of their current cars and the much-anticipated Cybertruck to hit Musk’s sales growth targets.

Speaking of the Cybertruck, it’s been showing some signs of weak demand, and Tesla hasn’t even broken out its delivery numbers yet. They did hand over a good number of Model 3 and Model Y vehicles, but the future looks a bit uncertain.

Interestingly, Tesla shares had a strong run in 2024, rising over 60% after Trump’s election win. Musk is hoping to use his influence to push for a smoother federal approval process for autonomous vehicles, which could help them out in the long run.

However, Tesla’s self-driving tech is under scrutiny, facing lawsuits and investigations. There’s a lot of chatter about whether they might have oversold the capabilities of their vehicles.

On top of that, traditional automakers are catching up. Tesla’s registrations in Europe dropped by 24% in October, with Volkswagen’s Skoda Enyaq SUV taking the crown as the best-selling EV.

There’s also talk that Trump’s team might end the $7,500 tax credit for EV purchases, which could slow down the shift to electric vehicles in the U.S. It’s a lot to unpack, and it seems like the road ahead for Tesla is getting bumpier.