2024 was not a remarkable year for Tesla. The company experienced a decline in its annual sales for the first time in a decade with fewer vehicle deliveries compared to 2023. Figures from its Q4 2024 report showed that it was short of the 515000 units needed for the quarter to surpass the full-year total of 2023. The Cybertruck, which was introduced in late 2023 and has gained both fanfare and snide remarks, failed to boost 2024 sales.
Missed 2024 Sales Target
The company announced on 2 January 2025 that it delivered 1.78 million vehicles worldwide for the entire 2024. This was 2.2 percent lower than the 1.81 deliveries in 2023. Furthermore, from this number, 85133 delivered vehicles represented the “other models” category which include the Model S sedan, Model X SUV, and the Cybertruck.
Note that the drop in 2024 sales missed the targeted 50 percent annual growth rate. Tesla has been missing this mark over the last years despite aggressive sales promotional tactics like unrelenting price cuts on vehicles like the Model 3 and Model Y. It has also offered substantial discounts on inventory models to clear stock at the end of 2024.
The lower sales performance was expected even in Q1 2024 when it produced over 430000 units but only delivered about 387000 units. This indicated a gap between production and delivery. Q2 showed recovery when it delivered 444000 units versus 411 produces. This trend was sustained until Q4 but sales were not enough to surpass 2023.
Cybertruck Not Enough
Tesla introduced the Cybertruck in November 2023 to expand its product line and create a new segment of the market that combines the existing segments for traditional pick-up trucks and utility vehicles and electric vehicles. It was initially experimental but Tesla chief executive Elon Musk teased that it had over 1 million pre-sale registrations.
It outsold the combined sales of the Ford F-150 Lightning and Rivian R1T in May 2024 with 3907 units against 3590 units. There were high hopes that it could help boost the growth of Tesla for 2024. However, despite its potential, it had no significant effect on the overall sales performance. The supposed 1 million registration did not materialize.
The Cybertruck has received mixed reviews. It has showcased some engineering feats. The design is a point of contention. Some considered it unappealing. There were also several viral videos showing how Cybertrucks got stuck in snow and sand. Numerous recalls have been made since it was launched. It has also appeared in the used car market.
Expectations For 2025
Existing models like the Model 3 and Model Y have reached a saturation point in geographic markets like the U.S. Competition is also increasing. Ford has reorganized itself to focus on EV production. Furthermore, in other geographic markets, Chinese companies are emerging as serious competitors with less expensive electric vehicles.
Sales might or might not recover in 2025 and beyond. European countries have made changes in incentives related to electric vehicle sales. The U.S. under the Trump administration is also planning to remove incentives on all EVs to support domestic automakers who are still dependent on vehicles running on internal combustion engines.
Tesla is planning to introduce more affordable EVs in 2025 and the coming years to appeal to a larger segment of the market and boost its sales and growth. Furthermore, with the easing of inflation in the United States, it is possible for the greater EV market to recover along with lower interest rates and the return of consumer confidence.
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