Tesla stock fell on Q4 delivery, first annual sales decline

Tesla ( TSLA ) stock is sliding at the start of 2025 after a big delivery miss in the fourth quarter and a general decline for the electric car maker.

For the quarter, Tesla said it delivered 471,930 vehicles globallymissing analyst estimates of about 510,000 as compiled by Bloomberg. This figure is just barely above the 463,000 delivered last quarter and below the 484.5K delivered a year ago.

For 2024, Tesla delivered 1.78 million vehicles, missing analyst estimates by 1.8 million and resulting in a total below 2023’s 1.8 million vehicles delivered. This is the first year-over-year decline for Tesla, suggesting new competition, demand and global economic conditions could hurt the company

Tesla shares fell more than 3% in early trading to start the first trading day of the year.

Tesla’s reporting of a year-over-year drop in deliveries is likely to come as a shock to investors, as it was only a short time ago that the company reported a 50% compound annual growth rate (CAGR). Although Tesla warned last year that its “vehicle volume growth may be significantly lower than the growth rate achieved in 2023,” due to preparations to launch its next-generation vehicles at the Gigafactory Texas, investors most likely did not expect an annual delivery decline.

Meanwhile, China’s BYD ( BYDDY ) reported global deliveries of approximately 4.3 million passenger cars in 2024. Although Tesla’s biggest rival in China said 2.5 million of those were hybrids, a reversal from years earlier, deliveries still top BYD’s pure electric vehicles up to about 1.76 million — knocking on Tesla’s door.

However, Tesla bulls see this as a short-term blip.

“Looking ahead to FY25, we remain very confident in Tesla’s ability to accelerate delivery growth in FY25 with 20%-30% delivery growth as a focus for Street as TSLA is also expected to launch its lower-cost electric car in early 2025 to spur growth for vehicle deliveries,” Wedbush analyst Dan Ives wrote in a note to investors Thursday morning.

In addition to the vehicle’s growth rate accelerating by 2025, Ives believes that increasing adoption of Tesla’s FSD (full self-driving) software, the rollout of robotaxi testing and products like the Cybercab will take Tesla’s market cap to $2 trillion and beyond.

“Laser focus for Tesla is the 2025 re-accelerated delivery growth story and FSD penetration with autonomous the big vision for Musk & Co. Anyone selling today on weaker 4Q delivery numbers, we are strong buyers,” Ives wrote.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him further Twitter and further Instagram.

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