Tesla's Bumpy Road: Declining Deliveries Amid High Borrowing Costs and Market Challenges

Tesla reported its first drop in yearly deliveries as incentives failed to attract buyers amid high borrowing costs. Musk shifted focus to self-driving taxis for future growth, with current models facing tougher competition. Changes in U.S. EV policy could further impact Tesla's market performance.

Tesla, the electric vehicle (EV) giant led by Elon Musk, reported a notable drop in yearly deliveries, marking the first decline in recent times. Despite offering lucrative year-end incentives, high borrowing costs and stiff competition dampened demand for Tesla's aging lineup, including the much-anticipated Cybertruck.

Musk had previously suggested modest growth for 2024 deliveries and rolled out various promotions to boost sales. However, diminished European subsidies and a market shift in the U.S. towards cheaper hybrid vehicles, along with competition from China's BYD, have posed significant challenges.

Amid these hurdles, Musk is focusing on a future self-driving taxi business to enhance Tesla's value. Yet, with self-driving technology still in the developmental phase, Tesla must depend on its existing models and the Cybertruck to achieve the projected 2025 sales growth. However, demand for the Cybertruck appears to be weakening.

(With inputs from agencies.)