Tesla has sluggish start to the year with first annual sales decline in nearly a decade
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Tesla’s global sales rose 2.3 per cent in the fourth quarter after a sluggish start to the year contributed to the electric car company’s first year-over-year sales decline since at least 2015.
The annual decline for the Austin, Texas, company came despite offers such as zero per cent financing, free charging and low-priced leases.
Tesla delivered 495,570 vehicles from October through December, boosting deliveries to 1.79 million for the full year. But that was 1.1 per cent below 2023 sales of 1.81 million, as overall demand for electric vehicles in the U.S. and elsewhere slowed.
The fourth-quarter boost came with a cost. Analysts polled by FactSet expected Tesla’s average sales price to fall to just over $41,000 US in the quarter, the lowest in at least four years.
That doesn’t bode well for Tesla’s fourth-quarter earnings, which the company said it would announce on Jan. 29.
More competition, aging models
In 2022, Tesla predicted that its sales would grow by 50 per cent most years, but the prediction ran into an aging model lineup and increased competition in China, Europe and the U.S. In the U.S., analysts say most early adopters of technology already have electric vehicles, and more mainstream buyers have concerns about range, price and the ability to find charging stations on longer trips.
The fourth-quarter deliveries fell short of Wall Street estimates. Analysts polled by data provider FactSet expected sales of 498,000 vehicles.
Tesla shares fell 5.2 per cent in trading early Thursday, but shares are up more than 50 per cent over the last 12 months, surging with the election victory by Donald Trump.
The company made headlines this week when a Cybertruck — one of its signature models — caught fire and exploded outside of a Trump hotel in Las Vegas. Firework mortars and camp fuel canisters were found stuffed into the back of the Cybertruck, according to law enforcement, and Tesla CEO Elon Musk said in a post on X that the explosion was unrelated to the vehicle itself.
One person died and seven others were injured Wednesday when a Tesla Cybertruck that appeared to be carrying fireworks caught fire and exploded a Trump hotel in Las Vegas, authorities said.
Falling sales early in the year led to once unheard of discounts for the automaker, cutting into its industry leading profit margins.
Competition from legacy and startup automakers is also growing as they try to nibble away at the company’s market share.
Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 23,640 of its more expensive models that include X and S, as well as the new Cybertruck.
