Tesla warns of slower sales growth in 2024

Tesla is predicting a sharp sales slowdown this year, becoming the latest car firm to warn of drooping demand.
Tesla is predicting a sharp sales slowdown this year, becoming the latest car firm to warn of drooping demand.

Tesla is predicting a sharp sales slowdown this year, becoming the latest car firm to warn of drooping demand.

Tesla Shares Fall as Company Anticipates “Notably Lower” Growth in 2024

Tesla, led by Elon Musk, has announced expectations of “notably lower” growth in 2024 compared to the previous year, which saw a 38% increase in deliveries. The company’s shares dropped nearly 6% in extended trading following the announcement. 

Tesla had previously reduced prices multiple times in 2023 to maintain demand, resulting in a record 1.8 million car sales but with revenue growth slowing towards the end of the year. 

Elon Musk also issued a warning about Chinese EV rivals, suggesting trade barriers are necessary to prevent them from dominating the global automotive market.

Shift in Growth Waves and New Vehicle Platform

Tesla indicated that it is currently transitioning between two growth waves. 

The first wave, linked to the global expansion of the Model 3/Y platform, has concluded, while the company anticipates a new growth phase with the global expansion of the next-generation vehicle platform. 

The announcement hinted at plans for a new compact car model, more affordable than the existing Model Y.

Elon Musk Advocates for Trade Barriers Against Chinese EV Manufacturers

Elon Musk expressed concern about Chinese EV manufacturers, stating that they could “pretty much demolish most other car companies in the world” unless trade barriers are implemented. 

China’s BYD surpassed Tesla as the world’s top-selling electric carmaker in the last quarter of 2023. Musk’s call for trade barriers comes amid increasing competition in the EV market.

Challenges in the Global EV Market and Wider Industry Trends

The warning of slower growth coincides with signs of weakness in the global EV market after years of robust growth. In the UK, electric vehicle sales rose in 2023 but struggled to gain market share against traditional cars. 

In China, EV manufacturers have reduced prices due to economic slowdown, and in Europe, sales of battery electric cars declined sharply in the last month. Major US car companies, including Ford and General Motors, have scaled back production of electric vehicles.

Financial Performance and Revenue in Q4 2023

Tesla reported Q4 2023 revenue of $25.1 billion, marking a 3% increase compared to the same period in 2022. The profits were lower than analysts had anticipated, contributing to the decline in Tesla’s stock value in extended trading. 

The company acknowledged being between growth waves and emphasized the forthcoming next-generation vehicle platform as a catalyst for future expansion.

Gary Monroe

Gary Monroe is a seasoned contributor to the Los Angeles Business Magazine, where he offers insightful analysis on local business trends and economic developments. With a focus on Los Angeles' dynamic commercial landscape, Gary's articles provide valuable perspectives for entrepreneurs and business professionals in the city.

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