Tesla Faces Challenges Amidst Declining EV Deliveries and Shifting Market Dynamics

Tesla reported its first annual fall in deliveries due to high costs and aging models. Although Elon Musk's promotions and plans for self-driving taxis aim to boost growth, competition from BYD and other factors pose challenges. The company's relationship with Trump may impact future regulations.

Tesla has reported its first yearly drop in vehicle deliveries, citing economic challenges and an aging lineup as key factors. Despite CEO Elon Musk's efforts to spur sales through end-of-year promotions, shares fell by 6% as high borrowing costs deterred customers.

The decline highlights growing competition, especially from China's BYD, coupled with reduced subsidies in Europe and a consumer shift in the U.S. towards hybrids. Tesla's promotional strategies could not fully counter these trends, according to Morgan Stanley analysts.

In response to stagnating EV demand, Musk is turning focus to a self-driving taxi business. Tesla's future growth depends on these new ventures and its upcoming Cybertruck, though doubts about demand and self-driving technology's timeline remain.

(With inputs from agencies.)