Tesla's Tumbling Deliveries: A Sign of Aging Models and Intensifying Competition

Tesla's annual deliveries dropped in 2024 despite a record fourth quarter. Intensifying competition, reduced subsidies in Europe, and weak consumer spending in China contributed to the decline. Lower prices pressured profit margins, but demand is expected to rebound in 2025 as interest rates drop.

Tesla's annual deliveries saw a decline for the first time in 2024, despite a record number of units delivered in the fourth quarter. This suggests a waning demand for its aging model lineup.

The company's shares dropped by 3% in pre-bell trading due to heightened competition, a reduction in European subsidies, and waning consumer spending in China. Notably, October registrations of Tesla vehicles in Europe dipped by 24%. Volkswagen Group's Skoda Enyaq SUV surpassed Tesla's Model Y as Europe's top-selling EV, according to JATO Dynamics.

Despite lower prices and incentives squeezing Tesla's vehicle sales profit margin last year, analysts expect demand to rise in 2025 following anticipated interest rate cuts by the U.S. Federal Reserve. In the final quarter, Tesla delivered 471,930 models 3 and Y, alongside 23,640 units of other models. Overall, Tesla handed over 495,570 vehicles in the last three months of 2024, slightly missing the estimate of 503,269 units.

(With inputs from agencies.)