New York (AFP) – Tesla reported a dip in full-year auto sales Thursday, missing a company forecast in a sign of rising electric vehicle competition in China and other markets. Elon Musk’s EV company reported 495,570 fourth-quarter deliveries. While that represented a quarterly record, it lagged Wall Street estimates and resulted in full-year sales of just under 1.8 million vehicles. This was around one percent less than the 2023 sales, even as Tesla said in October that it expected a “slight growth” in vehicle deliveries for the year.
Besides rising competition from producers like China’s BYD and legacy auto companies, analysts pointed to a sluggish ramp-up of production of the futuristic Cybertruck. Shares of Tesla fell sharply following the release, cutting into the company’s massive gains since the November 5 US presidential election. The sales figure caps a mixed 2024 for Tesla, a year in which Musk dove full-on into US electoral politics. He helped to deliver the presidency to Republican Donald Trump through massive contributions and the amplification of anti-immigrant and other Trump rhetoric on Musk’s X platform, the former Twitter.
But Tesla’s profits through the first three quarters of 2024 fell 31 percent from the equivalent period of 2023, a reflection of moves to slash prices in the wake of slowing demand. Tesla has called the current period of moderating sales reflective of its position “between two major growth waves,” with the next period of volume increases due to advances in autonomy and the introduction of new vehicle products. The company has faced pressure to roll out new vehicles, with Wall Street particularly eager to see a lower-priced model. The Model 3 currently starts at around $30,000.
Investors cheered a Musk statement in July that he plans a new, more affordable model in the first half of 2025, but the company has provided few details. CFRA Research analyst Garrett Nelson pointed to tepid deliveries of the Cybertruck, which customers first began receiving in November 2023. Tesla’s press release Thursday did not break out sales for the vehicle, which were a component of “other models.” Deliveries in this category stood at just 85,133 for the year. Musk has previously described the Cybertruck’s challenges as production-related, characterizing demand as robust. He has said he expects annual sales of 250,000 Cybertrucks in North America.
But today’s output appears to be well below the Cybertruck’s current installed capacity of above 125,000 per year, according to Tesla literature. “The ramp-up has been disappointing,” said Nelson, adding that the figures raise questions about demand for the vehicle. Though still not common on US roads, the massive, brutal-looking Cybertruck has become perhaps Tesla’s most emblematic vehicle, generating both adoration from Tesla fans and mockery on social media from critics. Authorities were investigating the explosion of a Cybertruck Wednesday outside Trump hotel in Las Vegas that killed one person.
– Autonomous push –
Shares of Tesla rose more than 60 percent between the November 5 election of Trump as president and the end of 2024, with the market certain that Musk’s clout with the incoming administration will benefit Tesla initiatives in autonomous driving and artificial intelligence. “The next step in this broader Tesla strategic vision begins is the autonomous and AI era which will be accelerated under a Trump White House,” said analysts at Wedbush, which called Tesla’s 2024 auto sales a secondary issue compared with Tesla’s growth story.
Tesla skeptics point to the on-the-ground progress of Alphabet-owned Waymo, which currently runs robotaxis in three US cities. A heavily-touted October launch event in Los Angeles showing off Tesla’s autonomous robotaxi vehicles received mostly lackluster reviews. But Tesla bulls point to the company’s progress in driver-assistance technologies, which is providing the company with data that it believes will ultimately lead to full autonomy. “We still have a buy on the stock,” said Nelson, who also foresees a rebound in sales next year. “2025 is going to be a year where there’s significant progress in developing the framework on autonomous driving. So that’s a positive for the stock.”
Shares of Tesla sank 6.9 percent in early-afternoon trading.
© 2024 AFP
