Increased competition and the high price of electric vehicles have resulted in lower-than-average sales for the American company.
Tesla’s global annual sales have fallen for the first time in 9 years, according to new company data. The company of Elon Musk sold 1.79 million vehicles in 2024, which represents a decrease of 1.1% compared to its sales in 2023 as demand for electric vehicles slows in the US and other countries.
In the latter part of the year, the company increased its sales by 2.3%, but it was not enough to overcome the global loss of 2024. In addition, US analysts expect Tesla’s average selling price to fall below 41,000 dollars, the lowest in at least four years.
This is because the drop in sales at the beginning of the year caused exceptional discounts for the automobile manufacturer, which reduced its margins of benefit. Most of Tesla’s sales in 2024 came from the Models 3 and Y, smaller and less expensiveand the company only sold 23,640 of its most expensive models, which include the X and S, as well as the new Cybertruck.
Why don’t customers buy Tesla?
Buyers are concerned about autonomy, price and access to charging stationsfor electric vehiclesaccording to analysts. Another is competition from traditional car manufacturers, which are reducing Tesla’s market share.
In 2022, Tesla predicted its sales would grow by 50% in most years, but Musk hit reality: its model range is aging and the competition in China, Europe and the United States has increased. Now Tesla has to face companies like the Chinese BYD, which announced this Thursday that its total sales they shot 41% last yearwith 1.77 million electric vehicles sold. Although Tesla’s sales surpassed BYD’s last year, BYD is still competing with Tesla to become the world’s best-selling electric vehicle maker.
American investors have also been driving Tesla shares higher since the November election result, betting that the incoming Trump administration will relax the regulations on electric and will help Tesla.
Truist Securities analyst William Stein believes Tesla will struggle to sell vehicles in the coming months and expects the additional discounts used to boost sales will weigh on its financial results.
Tesla shares will continue to rise in 2024
That sales loss doesn’t necessarily translate to Tesla’s stock price, which fell nearly 7% on Thursday but have risen more than 50% in the last 12 months after Trump’s victory. Daniel Ives, a financial analyst at Wedbush, said he believes the stock is still worth buying despite the sales decline.
Tesla is expected to release its fourth-quarter 2024 results on January 29.