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Tesla Shares Tumble as First Ever Annual Deliveries Goal Missed, But There May Be Some Reasons for Optimism

AInvestThursday, Jan 2, 2025 9:30 am ET
1min read

Tesla shares are plummeting as the EV giant missed its Q4 delivery target and experienced its first-ever year-over-year decline in deliveries. The stock fell nearly 4% in pre-market trading, after surging 62% in 2024.

What Happened:

Tesla's Q4 deliveries totaled 495,570 vehicles, falling short of the consensus estimate of 512,277. For the entire year, Tesla delivered 1.77 million vehicles, failing to show growth compared to 2023, when it delivered 1.8 million vehicles. To achieve positive year-over-year growth, Tesla would have needed to deliver at least 515,000 vehicles in Q4.

For many years, Tesla has not issued quarterly delivery targets, instead setting an annual growth rate of around 50% for deliveries. Some years, the company has exceeded this target, while in others, it has fallen short. With global demand for electric vehicles slowing and competition in the Chinese market intensifying, Tesla faced a challenging year. However, during the Q3 earnings call, Tesla announced that it still aimed to achieve delivery growth in 2024.

Despite the Q4 delivery miss, Tesla shares received a boost in the latter half of the year due to Elon Musk's involvement in President-elect Donald Trump's election campaign. Musk, the world's richest person, invested approximately $277 million to promote Trump and other Republican candidates. This investment paid off, as Trump's victory led to a significant increase in Tesla shares during the last two months of the year.

However, some analysts believe that Trump's win may not actually boost Tesla's deliveries, as Trump is not a strong advocate for electric vehicles. His support is expected to focus more on autonomous vehicles (AV) and robotics, rather than directly benefiting Tesla's vehicle business.

Still, investors have high expectations for Tesla, and the Q4 delivery miss does not necessarily represent the overall performance of the company. Notably, Tesla produced 459,445 vehicles in the fourth quarter, significantly fewer than the number of deliveries. This discrepancy in production may shift the focus to a potential redesigned Model Y.

On the other hand, Tesla delivered over 495,000 vehicles and deployed 11.0 GWh of energy storage products in Q4 – setting records for both deliveries and deployments. This indicates that despite the challenges, Tesla continues to achieve significant milestones in its energy storage business.

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