For the first time, Tesla reported an annual decline in vehicle deliveries in 2024, falling 1.1% compared to the previous year. Despite Elon Musk’s forecast for slight growth and an array of year-end incentives—including interest-free financing and free fast-charging—the automaker faced significant headwinds.
Rising competition, particularly from Chinese EV giant BYD, coupled with reduced subsidies in Europe and a shift towards lower-cost hybrid vehicles in the U.S., weighed heavily on demand. While Tesla’s China sales grew nearly 9% to a record high, this wasn’t enough to counterbalance the global slowdown. Tesla’s share price reflected investor concerns, dropping 6% on the news.
Analysts suggest Tesla’s current vehicle lineup may have hit market saturation. Morningstar’s Seth Goldstein noted that declining deliveries could limit the growth of Tesla’s ancillary services, such as autonomous driving software, charging networks, and insurance.
In response to slowing demand, Musk has shifted focus towards developing a self-driving taxi business—a move he hopes will redefine Tesla’s growth narrative. Meanwhile, political developments in the U.S. could work in Tesla’s favour. Musk’s public support for President-elect Donald Trump and substantial campaign donations may result in more favourable regulations for the EV industry.
While Tesla remains a leader in the EV space, the delivery dip highlights mounting challenges in a rapidly evolving market. The company’s ability to innovate and adapt will be critical in determining whether it can regain its growth trajectory.
