Well, it finally happened. After a decade of growth that made tech bros and Tesla fanboys think Elon Musk could walk on water (or at least drive on it), Tesla’s annual EV sales have officially declined. Sad day. 

(Source: Giphy) 

The numbers of course tell the story: Tesla sold 1.79 million vehicles in 2024, down from 1.8 million in 2023. Yeah, it’s a slim margin, but a loss is a loss. Even a record-setting Q4 delivery of 495,570 vehicles wasn’t enough to save Tesla’s bacon, falling short of analysts’ expectations of 512,277. Which is why in true Wall Street fashion, Tesla has slumped -4.75% on the day (at the time of this writing). 

So, what exactly went wrong? Well first off, Tesla’s not exactly out here handing out L’s for free. The company still has nearly half the U.S. EV market locked down, but competition is heating up faster than a Cybertruck in the desert sun. BYD, the Chinese EV juggernaut, sold 1.76 million electric vehicles in 2024 (up from 1.6 million in 2023) and moved a jaw-dropping 2.49 million plug-in hybrids. Meanwhile, legacy automakers like GM, Volkswagen, and Kia-Hyundai are pumping out EVs with lower price tags and fewer “quirks” (read: no yoke steering wheels or beta “self-driving” features).

(Source: New York Times) 

Plus, let’s not forget that Tesla’s price cuts and financing deals were basically a clearance sale disguised as strategy. Sure, they drove short-term sales, but they also raised eyebrows about whether Tesla’s demand is really as bulletproof as its fanbase claims.

Now here’s where things get weird: Despite the sales slump, investors are too busy daydreaming about Tesla’s future innovations to care about today’s numbers. Self-driving cars? Humanoid robots? Batteries for renewable energy? Sure, those are exciting, but none of them are paying the bills right now. For instance, Leonard Kostovetsky, a finance professor at Baruch College, put it bluntly: “Tesla isn’t making nearly enough money to justify the share price.” Translation: The stock is flying high because of vibes, not fundamentals (well except their banger revenue from Carbon Credits—which literally have NOTHING to do with selling their cars).

(Source: Bloomberg) 

Annnd then, there’s Elon Musk.His recent bromance with Donald Trump and other right-wing leaders has alienated some of Tesla’s more left-leaning customers, but investors seem unbothered. In fact, they’re betting that a Trump administration will fast-track regulations for self-driving cars, giving Tesla a leg up (we’ve talked about this before in previous articles and my thesis of massive deregulation still stands). 

But for now, what’s next for Tesla? Well, the company is promising a $25,000 EV by 2025, which could open the floodgates for middle-class buyers. But here’s the thing: They haven’t shown a prototype or given any real details. It’s starting to feel like the Cybertruck all over again—lots of buzz, but we’ll believe it when we see it (and when it doesn’t look like something out of Blade Runner). 

(Source: Giphy) 

What’s more is that Tesla’s also banking on a surge in EV sales as Americans rush to take advantage of federal tax credits before they potentially vanish. But again, like carbon credits, that’s a short-term sugar high, not a sustainable growth plan.

In the end, Tesla’s first annual sales decline in over a decade isn’t the end of the world, but it’s definitely a wake-up call. Between rising competition, pricing pressures, and Elon’s increasingly polarizing antics, the company’s road ahead looks a tad bumpy if I say so myself. Of course, in the grand scheme of things, investors might not be sweating just yet, but if Tesla can’t deliver on its big promises—or if the competition keeps eating into its market share—Tesla’s big swing energy that’s holding up the stock price might not be enough. 

Obviously, only time will tell, but in the meantime place your bets accordingly, friends. And as always, stay safe and stay frosty! Until next time…

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Stocks.News holds positions in Tesla as mentioned in the article.