Tesla’s Q4 Deliveries Fall Short of Expectations, Triggering Stock Plunge and Shaving Billions off Musk’s Fortune
Tesla, the electric vehicle giant led by Elon Musk, kicked off 2025 with a disappointing delivery report, missing Wall Street expectations and triggering a significant stock market selloff. The company announced on Thursday that it delivered 495,570 electric vehicles in the fourth quarter of 2024, falling short of the consensus analyst forecast of 498,000 deliveries. This miss, coupled with concerns over an aging product line and intensifying competition, sent Tesla shares tumbling nearly 6% in early afternoon trading, wiping out approximately $175 billion in market capitalization.
The Q4 delivery figure represents a modest 2.3% increase compared to the same period in 2023, marking the second consecutive quarter of year-over-year growth for Tesla. However, the slight improvement failed to impress investors, who had hoped for a stronger rebound following two consecutive quarters of year-over-year delivery declines earlier in 2024. These declines, and increased competition in the EV market, contributed to a sluggish stock performance for much of the year. Despite the Q4 miss, total deliveries for 2024 reached 1.79 million vehicles, a figure only slightly below the 1.81 million delivered in 2023. This minor dip represents a significant slowdown for the company, which had consistently reported annual growth of at least 35% since 2016.
Analysts offered diverging perspectives on the significance of the delivery figures. Morgan Stanley analyst Adam Jonas attributed the shortfall to Tesla’s "relatively aged product and increased availability of lower priced competition globally." This assessment underlines the growing pressure on Tesla from established automakers and emerging EV startups, particularly in the more affordable segments of the market. In contrast, Wedbush analyst Dan Ives, a long-time Tesla bull, dismissed the selloff as a "knee-jerk reaction," arguing that the delivery number is "respectable." Ives’ optimistic view likely stems from his continued faith in Tesla’s long-term prospects, particularly in the realms of autonomous driving and software.
The market’s reaction to the delivery data underscores the heightened scrutiny Tesla faces as it navigates an increasingly competitive landscape. While the company enjoyed a remarkable 63% stock surge in 2024, driven largely by investor enthusiasm for its autonomous driving initiatives and the anticipated pro-business policies of the incoming Trump administration, the Q4 delivery miss served as a stark reminder of the challenges facing its core EV business. This shift in investor focus from delivery numbers to future technologies like autonomous driving reflects a belief in Tesla’s potential to disrupt the broader transportation sector. However, the Q4 results remind investors that current performance metrics still hold sway over market sentiment.
The delivery data also casts a shadow over Tesla’s upcoming Q4 earnings report scheduled for January 29. While Wall Street analysts are projecting record revenue of $99.7 billion, they also anticipate a net profit of $8.1 billion, the lowest annual figure since 2021. This mixed outlook indicates that investors are anticipating continued pressure on Tesla’s margins amid intensifying competition and ongoing investments in new technologies. The company’s ability to demonstrate progress in these areas while maintaining profitability will be key to regaining investor confidence and justifying its lofty valuation.
Beyond the immediate financial implications, the delivery miss and subsequent stock drop had a substantial impact on Elon Musk’s personal fortune. Musk, the world’s richest individual, saw his net worth plummet by $12 billion during Thursday’s trading session due to his significant stake in Tesla. Despite this substantial loss, his fortune remains staggering at $409 billion, anchored by his 13% stake in Tesla, valued at approximately $153 billion, as well as his holdings in SpaceX and xAI. This incident highlights the close link between Tesla’s performance and Musk’s personal wealth, underscoring the concentrated nature of his holdings and the volatile nature of the technology sector.
Adding to the tumultuous week for Tesla, a Cybertruck prototype exploded on Wednesday in an incident under investigation as a possible terror attack. The explosion, attributed by Musk to "very large fireworks and/or a bomb carried in the bed," resulted in the death of the vehicle’s occupant and injuries to seven others. While this incident is unrelated to the company’s delivery figures, it adds further complexity to an already challenging start to the year for Tesla. The incident raises questions about the security implications of autonomous vehicles and the potential vulnerabilities of new vehicle designs, potentially adding further scrutiny to the company’s product development and safety protocols.
