Tesla has reported its first-ever annual decline in vehicle deliveries, attributed to increasing competition and operational challenges. This decline has had a significant impact on the company and its market valuation.
Causes of Delivery Decline
Tesla's annual deliveries decreased to 1.79 million in 2024 from 1.81 million in the previous year. The company faces challenges from competitors such as Hyundai, BYD, General Motors, and Ford. Simultaneously, Tesla is encountering strategic challenges in Europe and inventory issues in North America, affecting its performance.
Market and Analyst Reactions
Bank of America downgraded Tesla's stock from 'Buy' to 'Neutral' due to execution risks and high valuation. Following the downgrade, Tesla’s stock fell to $392.91. Despite this, the bank raised its price target for Tesla from $400 to $490, considering the potential impact of the anticipated robotaxi service on its valuation.
Tesla’s Future Plans
Tesla is focusing on expanding its market reach by planning to introduce more affordable and autonomous vehicles in 2025, aiming for a growth rate of 20-30% in upcoming years. Additionally, Tesla achieved a significant milestone in energy storage by deploying 11.0 GWh in the fourth quarter of 2024. However, Elon Musk’s political involvement is seen as a potential distraction from Tesla's core operations.
Tesla continues to face significant challenges in the electric vehicle market. However, anticipated innovations and achievements in related fields, like energy storage, might improve its competitive stance in the future.
