Tesla shares slide after it reports first drop in annual deliveries
Tesla CEO and X owner Elon Musk speaks during an unveiling event for Tesla products in Los Angeles on Oct. 10, 2024.
Tesla | Via Reuters
Tesla posted its fourth-quarter vehicle production and deliveries report on Thursday. Here are the key numbers:
Total deliveries Q4 2024: 495,570
Total production Q4 2024: 459,445
Total annual deliveries 2024: 1,789,226
Total annual production 2024: 1,773,443
Results for the quarter represented the first annual drop in delivery numbers for Tesla, which reported 1.81 million deliveries in 2023. It reported 484,507 deliveries in the fourth quarter of 2023.
Tesla shares fell by as much as 7% in trading on Thursday.
Analysts had expected Tesla to report deliveries in the quarter of 504,770, including 474,000 Model 3 and Model Y EVs, according to a consensus of estimates compiled by StreetAccount. Tesla sent some investors a company-compiled delivery consensus of 506,763 vehicles, based on a survey of 26 analysts. A widely followed independent Tesla researcher, who publishes as Troy Teslike, predicted deliveries of 501,000.
Deliveries are the closest approximation of sales reported by Tesla but are not precisely defined in the company’s shareholder communications.
The fourth-quarter report comes after a huge late-year rally in Tesla’s stock, which finished 2024 up 63%. In mid-December, the shares reached a record, eclipsing their prior all-time high from 2021.
It was a big turnaround from the first quarter, when the stock plummeted 29%, its worst period since 2022, as the company contended with declining sales despite price cuts and incentives for buyers. On 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 back half of the year was Musk’s role in President-elect Donald Trump’s election campaign. Musk, the world’s richest person, poured in around $277 million to promote Trump and other Republican candidates, and spent weeks on the road campaigning in swing states.
Elon Musk speaks with U.S. President-elect Donald Trump at a viewing of the launch of the sixth test flight of the SpaceX Starship rocket, in Brownsville, Texas, U.S., November 19, 2024.
Brandon Bell | Via Reuters
Musk, who also runs SpaceX and xAI and owns social network X, has been tapped to co-lead an advisory group to the Trump administration that will aim to slash federal spending, personnel and regulations.
Sam Fiorani, a vice president at industry research group Auto Forecast Solutions, told CNBC in an email that Musk’s foray into politics may have “pulled his focus away from his core businesses.” However, the degree to which investors or EV buyers care won’t be reflected in Tesla’s numbers until the first quarter, he said.
Until recently, Tesla had been one of the only automakers mass producing 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 EV maker, especially when it comes to its charging network. But Tesla’s biggest operational challenge in the latest quarter was “the nuts-and-bolts job of being a car company.”
‘Piling up on used car lots’
Tesla has invested in a humanoid robotics initiative and chip development, and plans to produce a dedicated robotaxi and start a driverless ride-hailing service before 2027. While Musk and shareholders may not want to view Tesla as just a car company, most of the profits are still derived from vehicle sales.
George said that Tesla made a mistake not bringing “more affordable EVs in 2024,” and added that Cybertrucks — the company’s newest vehicle — are “piling up on used car lots.” The angular steel Cybertruck starts at around $80,000.
With competitors picking up market share in Europe, Tesla experienced a steep drop in sales in the region during the fourth quarter.
From January through the end of November, Tesla sold 283,000 vehicles in Europe, an approximately 14% decline from the same period a year earlier, according to registration data from the European Automobile Manufacturers’ Association, or ACEA. Registrations in Europe slid to 18,786 in November from around 31,810 a year earlier.
The company’s business in China was also pressured in the fourth quarter.
Fiorani said that while the Model Y is the second bestselling model in China, “its growth is failing to keep up with growth of the market.” Through November, sales of the Model Y were up more than 5% but overall EV sales in the country rose 8%, he said.
Meanwhile, BYD and other brands in China, including Chery, Li Auto, Jetour, LeapMotor and Aito, grew substantially faster than Tesla. BYD is also setting up plants outside of China and exporting prodigiously.
In North America, Tesla has remained dominant. The company offered a range of incentives and price cuts, even on its most popular Model Y SUV, during the fourth quarter to drive sales. Still, Tesla experienced a buildup of inventory.
During the fourth quarter, the company sent Cybertruck assembly line workers home for a few days, indicating that it may be looking to avoid flooding the market with too many of the vehicles.
Looking ahead to 2025, Musk said on an earnings call in October that Tesla expects to be offering lower-cost and autonomous vehicles in 2025, which should lead to “20% to 30% growth” over 2024.
WATCH: Chinese auto market could reach 55-60% EVs by end of 2025
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Larry Summers, president emeritus and professor at Harvard University, at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025.
Stefan Wermuth | Bloomberg | Getty Images
Former Treasury Secretary Larry Summers said Wednesday that he will resign from the board of OpenAI after the release of emails between him and the notorious sex offender Jeffrey Epstein.
Summers had announced Monday that he would be stepping back from all public commitments, but it was not immediately clear whether that included his position at the artificial intelligence startup.
“I am grateful for the opportunity to have served, excited about the potential of the company, and look forward to following their progress,” Summers said in a statement to CNBC.
OpenAI’s board told CNBC it respects Summers’ decision to resign.
“We appreciate his many contributions and the perspective he brought to the Board,” the OpenAI board of directors said in a statement.
Details of Summers’ correspondence with Epstein were made public last week after the House Oversight and Government Reform Committee released more than 20,000 documents it obtained pursuant to a subpoena from Epstein’s estate. Summers has faced intense scrutiny following the release of those files.
Summers joined OpenAI’s board in 2023 during a turbulent period for the startup. OpenAI CEO Sam Altman was briefly ousted from the company, though he returned to the chief executive role days later.
In the wake of “The Blip,” as some OpenAI employees call it, Summers was appointed to the board alongside Bret Taylor, former co-CEO of Salesforce, and Quora CEO Adam D’Angelo, who was the only member of OpenAI’s previous board who still held a seat.
Axios was first to report about Summers’ resignation from the board.
President Donald Trump on Friday asked the Department of Justice to investigate the relationship between Epstein and Summers, as well as Epstein’s ties to former President Bill Clinton, JPMorgan Chase and billionaire tech investor Reid Hoffman. Trump has been facing renewed pressure over his own past friendship with Epstein.
Summers is a former president of Harvard University, and Democratic Sen. Elizabeth Warren of Massachusetts told CNN on Monday that the university should sever ties with him. He announced his intention to step back from his public commitments later that day, but said he will continue to fulfill his teaching obligations at Harvard.
“I am deeply ashamed of my actions and recognize the pain they have caused. I take full responsibility for my misguided decision to continue communicating with Mr. Epstein,” Summers said in a statement to CNBC on Monday.
Congress on Tuesday agreed to pass a bipartisan bill ordering the Department of Justice to release all of its files on Epstein, clearing the path for Trump to sign it into law.
WATCH: House overwhelmingly votes to release more Epstein investigation files, sends bill to Senate
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