Tesla has experienced its first annual sales decline in nine years, a setback attributed to a sluggish start in the year. Despite a 2.3% increase in sales during the fourth quarter, Tesla’s full-year deliveries reached 1.79 million vehicles, down 1.1% from 1.81 million in 2023. The decrease occurred despite efforts to boost sales with incentives like zero percent financing, free charging, and lower lease prices.
Tesla delivered 495,570 vehicles in the last quarter of the year, below Wall Street’s expectation of 498,000 vehicles. Analysts also forecasted a drop in the average sales price to just over $41,000, potentially affecting Tesla’s fourth-quarter earnings, which are to be reported on January 29.
The company, based in Austin, Texas, previously projected a 50% sales growth year-over-year but faced challenges from an aging model lineup and increased competition in key markets such as China, Europe, and the U.S. In the U.S., most early adopters have already purchased electric vehicles, leaving mainstream buyers concerned about the range, cost, and charging infrastructure.
Tesla’s annual decline comes amidst heightened competition, with traditional and new automakers trying to capture market share. The company sold mostly its smaller Model 3 and Model Y vehicles, with only 23,640 of the pricier Model S, Model X, and Cybertruck sold.
Despite these challenges, Tesla remains a global leader in electric vehicle sales, narrowly surpassing Chinese competitor BYD, which reported a 41% increase in total sales last year, including 1.77 million EVs. However, Tesla’s overall production for the year fell short, producing 1.77 million vehicles, slightly less than its annual sales total.
