Big Fall: Elon Musk's Tesla Shares Drop 7% - Cybertruck Burning Or Sales-Dip, What's The Reason?

Tesla ’s stock took a hit on the first trading day of 2025, plunging as much as 7% following the release of the company’s annual delivery data, which came in below Wall Street expectations.

Despite a boost in deliveries during the fourth quarter, Tesla’s overall sales for 2024 fell short, raising concerns about the company’s future earnings and its position in the increasingly competitive electric vehicle market. This is first sales decline in 9 years. 

Tesla Annual Sales Decline and Sluggish Demand
According to an Associated Press report, Tesla's global sales saw a modest 2.3% increase in Q4 2024, after a slow start to the year. However, the Austin-based company experienced its first year-over-year sales decline since at least 2015.

Tesla delivered 495,570 vehicles between October and December, pushing the total number of vehicles delivered in 2024 to 1.79 million. While this was an improvement compared to earlier quarters, it still represented a 1.1% drop from 2023, where Tesla had sold 1.81 million vehicles.

Price Cuts and Discounting Push Profits Lower
In an attempt to maintain demand, Tesla offered aggressive pricing strategies, including 0% fina
ncing, free charging, and discounted leases, as mentioned by the Associated Press.

While this helped drive some sales, it also led to a drop in the company’s average sales price, which analysts predict will fall to just over $ 41,000 in Q4—its lowest in at least four years. The price cuts came at a cost to Tesla’s profit margins, which had been one of the key factors behind its market dominance.

Wall Street Missed Expectations
The fourth-quarter delivery data was particularly disappointing, missing Wall Street’s expectations of 498,000 deliveries, as per the report by AP.
Despite the decline in stock price, Tesla shares have risen more than 50% over the past year, buoyed by market optimism following the election victory of Donald Trump .