Tesla faces backlash as first annual sales decline shakes investors
- New vehicle sales increased in the U.S. by 2.7% last year, driven by lower prices and interest rates.
- Tesla experienced its first-ever annual sales decline as competition from other electric vehicle manufacturers increased.
- Analysts anticipate better sales incentives in 2025 due to rising inventory and expected further interest rate cuts.
In the United States, new vehicle sales saw a rise of 2.7% in 2024 as prices and interest rates eased slightly, allowing for more affordability in the SUV, car, and truck markets. Despite an average sales price exceeding $47,000, over 16 million vehicles were sold, leading to the best year since 2019. Electric vehicle sales also climbed by 8.8%, surpassing previous records, although the growth rate decelerated compared to 2023. General Motors and other automakers reported increased sales, while Stellantis faced a significant drop in sales due to an excess of high-priced inventory. Industry analysts predict that discounts and low-interest financing deals will improve further in 2025 as inventory levels rise and automakers work to boost sales, reflecting a shift in focus towards more competitive pricing. Concurrently, Tesla reported a decline in annual sales for the first time, struggling to maintain its market dominance amid increasing competition from other manufacturers introducing new electric models. Tom Tesla delivered just under 1.8 million vehicles in 2024, a slight reduction compared to 2023’s figures. As competition intensifies, Tesla faces an uncertain future, particularly with the potential changes in tax credits that could influence electric vehicle sales.