Tesla sales declined for the first time in the company’s history last year, the company reported Thursday, reflecting what analysts said was a lack of new models in an increasingly competitive market for electric vehicles.
Vehicle deliveries fell to 1.79 million, representing a drop of 1.1% from 1.81 million vehicles in 2023.
Tesla shares fell about 6% Thursday to $379.28.
Edmunds auto analyst Jessica Caldwell noted Tesla’s core model lineup has seen few changes in recent years.
“Especially for EVs, you have to attract new buyers and returning buyers,” she said. “In the EV market people want something new and fresh.”
Beyond a news release listing quarterly and annual numbers, the company had no comment, although it will hold a public webcast on financial results Jan. 29. Chief Executive Elon Musk posted 25 comments on X on Thursday morning, 23 of them political but none about Tesla.
For the record:
2:35 p.m. Jan. 2, 2025An earlier version of this article said Elon Musk posted 25 comments on X on Monday morning. It was Thursday morning.
Musk’s increasingly conservative politics and his alignment with Republican President-elect Donald Trump might also be a factor in left-leaning states such as California, its biggest U.S. market, Caldwell said.
“There are people with a negative image of Elon Musk and that’s tainted the Tesla a bit.”
Most of the sales decline occurred in the fourth quarter, ended Dec. 31, despite cut-rate financing deals offered by Tesla. Given the company’s commanding lead in electric vehicle market share, slow or no growth at Tesla adds another challenge to California Gov. Gavin Newsom’s zero-emission vehicle aspirations. The state is under his mandate to ban new sales of traditional gasoline-powered cars by 2035.
Tesla, once a darling of California electric vehicle buyers, has been taking hits in the Golden State, with sales down 3.5% in the third quarter, according to the state dealers trade group. Tesla itself doesn’t break out numbers state by state. Fourth-quarter estimates from the California New Car Dealers Assn. will be available later this month.
Whether Tesla’s drop indicates deeper trouble in the EV market in general will become clearer as other companies report their 2024 sales in coming days. The rapid growth in the market for electric vehicles has slowed as customers resist higher prices and balk at an inefficient public charging system.
Tesla once had the EV market almost entirely to itself, but that’s no longer the case. The Ioniq 5 from Hyundai and the EV6 and EV9 from Kia are selling especially well. Dozens of models from other carmakers have been introduced in recent years, more than a dozen in 2024 alone from Volvo, Volkswagen, Cadillac, GMC, Polestar, Porsche and others.
The EV market could take a hit if Trump follows through on plans to eliminate the federal EV buyer tax credit of up to $7,500 a vehicle.
Newsom has said he will seek to provide state tax credits should that happen, but his plan would exclude Tesla, given how much the state has already spent on Tesla subsidies. Despite slowing growth, Tesla remains by far the top seller of EVs in California and across the United States.
Tesla investors can expect a new round of strong growth, according to Musk, from the introduction of robotaxis, although he nas been promising full self-driving Teslas since at least 2017 but has yet to deliver.
