Tesla stock (TSLA) is slipping as 2025 begins, following supply disruptions in the fourth quarter and the electric vehicle maker posting an overall down year.

For the quarter, Tesla said it delivered 471,930 vehicles worldwide, missing analyst estimates compiled by Bloomberg of around 510,000. That number is just above the 463,000 units shipped last quarter and below the 484.5,000 units shipped a year ago.

For 2024, Tesla delivered 1.78 million vehicles, missing analyst estimates of 1.8 million, putting the total below the 1.8 million vehicles delivered in 2023. This is the first year-over-year decline for Tesla, suggesting new competition, demand and global economic conditions could hurt the company

Tesla shares fell over 3% in early trading to start the first trading day of the year.

Tesla’s reporting of a year-over-year decline in deliveries is likely to come as a shock to investors, as the company only recently reported a compound annual growth rate (CAGR) of 50%. Although Tesla warned last year that its “vehicle volume growth rate could be significantly lower than the growth rate in 2023,” investors most likely were not expecting an annual decline in vehicle volume as it prepares to launch its next-generation vehicle at Gigafactory Texas Deliveries calculated.

Meanwhile, China’s BYD (BYDDY) reported global deliveries of about 4.3 million passenger cars in 2024. Although Tesla’s main rival in China said 2.5 million of those were hybrid vehicles, a reversal from previous years, BYD’s deliveries are still up to around 1.76 million purely electric vehicles – are knocking on Tesla’s door.

However, Tesla bulls view this as a short-term blip.

“Looking ahead to FY25, we remain very confident that Tesla can accelerate delivery growth through FY25, with 20% to 30% delivery growth the Street’s focus as TSLA also expects to launch its lower-cost electric vehicle in early 2025 “Wedbush analyst Dan Ives wrote in a note to investors on Thursday morning.

In addition to accelerating vehicle growth in 2025, Ives expects the increasing adoption of Tesla’s FSD (full self-driving) software, the introduction of robotaxi testing and products like the Cybercab to push Tesla’s market cap to $2 trillion and will increase more.

“The laser focus for Tesla is on the story of re-accelerating delivery growth in 2025 and FSD penetration with autonomous vehicles – the big vision for Musk & Co. Any sell-off today due to weaker Q4 delivery numbers is a strong buyer for us.” , wrote Ives.

Pras Subramanian is a reporter for Yahoo Finance. You can keep following him Twitter and further Instagram.

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