Tesla released its fourth-quarter vehicle production and delivery report on Thursday. Here are the key details:

Total deliveries Q4 2024: 495,570

Total production Q4 2024: 459,445

Total annual deliveries 2024: 1,789,226

Full year production 2024: 1,773,443

The quarterly results marked the first annual decline in delivery numbers for Tesla, which reported 1.81 million deliveries in 2023. 484,507 deliveries were reported in the fourth quarter of 2023.

Tesla shares fell as much as 7% in trading on Thursday.

Analysts had expected Tesla to report 504,770 deliveries in the quarter, including 474,000 Model 3 and Model Y electric vehicles, according to a consensus estimate compiled by StreetAccount. Tesla provided some investors with a company-compiled delivery consensus of 506,763 vehicles based on a survey of 26 analysts. A widely respected independent Tesla researcher who publishes as Troy Teslike predicted deliveries of 501,000.

Deliveries are the closest to Tesla’s reported sales, but are not precisely defined in the company’s shareholder announcements.

The fourth-quarter report follows a huge year-end rally in Tesla shares that ended 2024 up 63%. In mid-December, the stock reached a record high, surpassing its previous all-time high from 2021.

It was a big turnaround from the first quarter, when the stock plunged 29%, its worst period since 2022, as the company struggled with declining sales despite price cuts and incentives for buyers. At the company’s first-quarter earnings call in April, CEO Elon Musk told investors that while he expected “higher sales this year than last year,” the growth rate would slow from 38% in 2023.

The biggest story at Tesla in the last half of the year was Musk’s role in President-elect Donald Trump’s election campaign. Musk, the world’s richest person, invested about $277 million to promote Trump and other Republican candidates and spent weeks campaigning in swing states.

Musk, who also runs SpaceX and xAI and the social network

Sam Fiorani, vice president of industry research group Auto Forecast Solutions, told CNBC in an email that Musk’s foray into politics may have “distracted him from his core business.” However, the extent to which investors or electric vehicle buyers care will not be reflected in Tesla’s numbers until the first quarter, he said.

Until recently, Tesla was one of the few automakers to mass-produce battery-electric vehicles. The company now faces an onslaught of competition from domestic automakers, including General Motors, ford And Rivian as well as BYD in China, Hyundai in Korea and European auto giants BMW And Volkswagen.

Patrick George, editor-in-chief of InsideEVs, told CNBC that he thinks Tesla still does many things better than any other electric vehicle maker, especially when it comes to its charging network. But Tesla’s biggest operational challenge last quarter was “the core mission of an automotive company.”

Tesla has invested in a humanoid robotics and chip development initiative and plans to produce a dedicated robotaxi and launch a driverless ride-sharing service before 2027. While Musk and his shareholders may not want to view Tesla as just a car company, the majority of its profits continue to come from vehicle sales.

George said that Tesla had made a mistake by not focusing on “bringing more affordable electric vehicles to market in 2024,” adding that Cybertrucks – the company’s newest vehicle – are “piling up on the used car lots.” The square steel Cybertruck starts at around $80,000.

As competitors in Europe gained market share, Tesla saw a sharp decline in sales in the region in the fourth quarter.

From January to the end of November, Tesla sold 283,000 vehicles in Europe, down about 14% from the same period last year, according to registration data from the European Automobile Manufacturers’ Association (ACEA). Registrations in Europe fell to 18,786 in November, after around 31,810 in the previous year.

The company’s business in China was also under pressure in the fourth quarter.

Fiorani said that although the Model Y is the second best-selling model in China, “its growth cannot keep up with the growth of the market.” Through November, Model Y sales rose more than 5%, but overall electric vehicle sales in the country rose 8%, he said.

Meanwhile, BYD and other brands in China, including Chery, Li Auto, Jetour, LeapMotor and Aito, grew significantly faster than Tesla. BYD also sets up plants outside of China and exports enormously.

Tesla is still dominant in North America. The company offered a series of incentives and price cuts in the fourth quarter, even on its most popular Model Y SUV, to boost sales. Nevertheless, Tesla experienced an increase in inventories.

In the fourth quarter, the company sent workers on the Cybertruck assembly line home for a few days, suggesting it may be trying to avoid flooding the market with too many vehicles.

Looking ahead to 2025, Musk said on a conference call in October that Tesla expects to offer lower-cost and autonomous vehicles in 2025, which should lead to “20% to 30% growth” in 2024.

REGARD: The Chinese automotive market could reach 55-60% electric vehicle share by the end of 2025