Where did Tesla go to the request?

More than any other American company, Tesla (Tsla 1.08%)) deserves the credit to make the industry of electric vehicles (EV) viable. After decades, even generations of discussions on an electric car, Tesla took the dominant concept, expanding production and turning a well -stored profit against long chances, defying expectations.

This success in an industry which, according to many, will eventually supplant traditional combustion vehicles, as well as its major promises on autonomy, has enabled Tesla to win an assessment from the sky and market capitalization now more than 1 dollars, which is compared to peers like General Motors And Ford This trade has multiple to a figure of their income.

Depending on the stock graph below, things continue to appear well for Tesla. As you can see, the stock has jumped 56% since the end of 2023, overcoming a previous setback last year.

TSLA data by Ycharts.

However, now that the results of the year of Tesla are underway for 2024, an overview of the figures indicates that the company is much lower than indicates the thrust of the actions, and according to a number, Tesla could be in serious difficulty.

The drop in car sales of Tesla

Investors already knew that Tesla vehicle sales dropped in 2024, decreasing by 1.1% to 1.79 million, but the Titan EV had just confirmed that automobile income was also down last year, down From 6% to 77.1 billion dollars. Total turnover has further increased by 1% this year to 97.7 billion dollars thanks to the growth of its storage and generation of energy and services, which are mainly based on software. But vehicles are the main component of the company, and its services, which have represented $ 10.5 billion in income, also depend on them.

The drop in Tesla of car income means that sales of volumes from its vehicles and the average selling price has decreased. This happened even if it deployed the new cybertruck, probably expanding its production capacities as well.

Tesla dropped prices on its vehicles last year. It is not entirely known why, but generally companies reduce prices to stay competitive with the market and move the inventory, and these rules also apply to Tesla. According to the conventional laws of the economy, when prices drop, demand is supposed to increase, but that is not what happened with Tesla. Instead, demand continued to fall.

The CEO Elon Musk has complained over the impact of high demand rates on demand, but high interest rates have affected all car manufacturers equally. Tesla recognized in its report on the results in the fourth quarter that “affordability remains in the lead for customers”.

As the graph below shows, Tesla’s market share among all vehicles, not only electric vehicles, fell in the past year in North America and Europe, while it is slightly increased in China, the world’s largest market in the world.

As you can see, Tesla’s market share has reached a tray in the past two years and has even started to decline. The company’s challenges extend beyond the general slowdown in the electric vehicle market; It also loses a global market share in the automotive industry.

There is no clear reason for this set, although there are several factors that seem to have caused it. These include growing competition from other manufacturers of electric vehicles, a basis of early adopters for electric vehicles that seem exhausted, concerns concerning the scope and load, and perhaps a certain brand fatigue, all the more More than Tesla has been slow to update its fleet, unlike traditional car manufacturers that publish new models each year.

Can Tesla resume growth?

Musk continues to make major promises around autonomy, and if Tesla achieves full driving and robotaxis as he envies, the current growth break does not matter. However, the market seems to neglect the obvious challenges that the company is faced.

Tesla said he had a capacity of three million vehicles, and he plans to return to vehicle growth in 2025, although he did not give specific figures. Analysts are planning to grow 19% income this year, most of which should come from vehicle growth.

For the moment, investors seem to trust Musk as the stock increased after hours despite the missing estimates, but Tesla could have a long way to go if the request continues to be disputed. Given its noble evaluation, Tesla’s stock seems to have more to lose than winning at this stage.