Tesla reports its first annual sales decline

Tesla reports its first annual sales decline


new York
CNN

Tesla on Thursday reported the first full-year sales decline in its history as a public company, as increasing competition and slowing demand for electric vehicles hurt results.

The company reported fourth-quarter sales of 495,570 vehicles, up 2% year over year. However, that was far behind the 595,413 pure electric vehicles sold by Chinese rival BYD in the quarter. Tesla’s full-year sales of 1.8 million vehicles still exceeded BYD’s total annual EV sales by 24,000, retaining its title as the world’s largest EV maker.

But Tesla’s total revenue in 2024 was 1% lower than its total revenue in 2023, the first time the company reported such a decline. Tesla once reported annual revenue growth of nearly 50% per year, and total revenue in 2023 rose a whopping 37% over 2022, so even a small decline represents a significant slowdown.

Tesla faces increasing competition, not only from Chinese rivals such as BYD, but also from long-established global automakers such as General Motors, Ford, Volkswagen AG and Korean partners Hyundai and Kia. Even though these legacy automakers represent only a fraction of Tesla’s EV sales because they primarily sell traditional gasoline-powered cars, they represent greater competition.

Tesla has responded to slowing demand by cutting vehicle prices in both China and the US. It has the advantage of being more profitable than its legacy automotive rivals, which are still losing money selling electric vehicles while trying to increase sales volume and reduce costs.

However, sales of electric vehicles in general continue to grow, both in the United States and globally, although more slowly than in the past.

Tesla (TSLA) shares fell more than 4% in early trading on the weak sales report. But they finished 2024 up 68%. Almost all of the gain came after Election Day as investors bet Tesla will do so Given CEO Elon Musk’s critical support for the president-elect, we will benefit from the policies of the new Trump administration.

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