Summary
- Tesla’s 2024 saw its first annual sales decline, impacted by a price war and slowing EV demand.
- Despite this, Tesla’s stock price has doubled, possibly due to investor confidence in Elon Musk and his political connections.
- Tesla missed Q4 revenue estimates and profit declined, though energy storage deployments set a record.
- The company faces increasing competition, particularly from BYD, and regulatory uncertainty regarding emissions credits and EV subsidies.
- Tesla aims for a “pivotal” 2025, focusing on Full Self-Driving improvements and launching robotaxi services.
Yesterday Tesla reported narrower profit margins in its quarterly and annual results, stemming from its first drop in annual sales in its history in 2024. This drop is partly a consequence of a price war in the electric vehicle sector due to increasing competition and a slowdown in demand for EVs in the U.S. market. However, the company’s large investor segments seem to focus more on CEO Elon Musk’s link to President Donald Trump than on the troubling noises from the automaker behind Musk’s fortune.
Against expectations, the company’s stock price has doubled in the past year, despite disappointing sales and delivery figures and losing its title to BYD as the top EV maker. Tesla says 2025 will be a pivotal year in its history as it continues improving Full Self-Driving and expects to launch Robotaxi services in parts of the US later this year as well as FSD Supervised in Europe and China.
Tesla in 2024: A Year of Two Halves
This past Wednesday, Tesla reported disappointing results on the top and bottom lines, with its revenue falling 8% from a year earlier. Back in April Tesla slashed more than 10% of its global workforce, which equated to approximately 14,000 employees. However, Tesla shares have risen 57% since the close of trading on Election Day, even with some of the company’s problems, which include a change in federal emissions regulations that could reduce the billions of dollars it earns from selling regulatory credits and increasing competition for electric car buyers.
Tesla already lost its title as the world’s largest electric vehicle maker to Chinese manufacturer BYD late last year, even though BYD has yet to enter the U.S. market. But with electric vehicle sales in China on the rise, it seems likely that Tesla will lose that title this year, especially if its sales continue to decline. In 2024, Tesla produced 1,774,442 electric vehicles, 4,500 shy of BYD’s 1,777,965.
Tesla’s fourth-quarter deliveries in 2024 totaled 495,570 vehicles, with 471,930 Model 3/Y units and 23,640 units of other models. For the full year 2024, the company delivered 1,789,226 vehicles, including 1,704,093 Model 3/Y vehicles and 85,133 other models.
In addition to vehicle deliveries, Tesla deployed 11.0 GWh of energy storage products in the fourth quarter. These products include the Powerwall and Megapack. The company’s total energy storage deployments for 2024 reached 31.4 GWh, setting a new record.
Q4 and FY 2024 Earnings
Tesla’s fourth-quarter 2024 earnings report was a mixed bag. While the stock is up over the past year, the carmaker missed revenue estimates at $25.71 billion versus the expected $27.22 billion, with net income falling from a year earlier. The stock shed 4% in extended trading. Tesla delivered 495,570 cars in the quarter, with its total deliveries this year at 1.8 million, marking the company’s first annual decline and consistent misses on quarterly targets.
After previously missing deadlines, Elon Musk unveiled the “Cybercab,” an autonomous taxi, and reaffirmed that production would begin in 2026. He teased a robotaxi service starting this June, for which details remain scarce, and an updated Model Y arriving in March. Tesla remains under federal investigation over its “full self-driving” feature and its involvement in fatal crashes. Musk called 2025 “pivotal” for Tesla.
And yet Tesla’s stock has risen anyway. Musk’s ties to the former administration have buoyed investor optimism about a friendly regulatory environment, with threatened tariffs on imports of Chinese cars and the extension of EV tax credits, despite some resistance from lawmakers. However, a protracted legal battle over Musk’s $56 billion compensation package adds uncertainty. Despite its CEO’s promises of autonomous robotaxis by 2026, Tesla’s autonomous driving technology has yet to meet expectations and faces safety scrutiny. Some investors believe that a favorable new administration could pave the way for the approval of autonomous driverless vehicles, which would boost Tesla’s value.
Tesla Is at a Crossroads
Yet, there are many question marks over the viability of autonomous driving, and the electric vehicle market in the U.S. is cooling down. Some analysts also believe that the controversy surrounding the CEO of Tesla, who openly supports far-right political figures and parties, is hurting demand for Tesla cars.
Apart from this, the company is vulnerable to regulatory changes that could affect its revenues. The withdrawal of carbon credits and subsidies on electric vehicles, besides the repealing of more stringent emissions standards, may hurt the sales and the market position of Tesla.
Despite these challenges, some analysts are still positive about Tesla’s prospects. They said that the loss of subsidies on electric vehicles may make Tesla’s competitive environment easier because traditional automakers will be forced to reduce their electric vehicle production.
How 2025 is Looking for Tesla
In short, Tesla faces an uncertain future in 2025. While the company has the potential to revolutionize the automotive industry with its autonomous driving technology, it also faces regulatory challenges, controversy, and a potential decline in demand. Tesla’s success in the coming years will depend on its ability to overcome these obstacles and deliver on its promises of innovation.