Tesla's production and delivery numbers for 2024 are in, and the results are sobering. The electric vehicle (EV) pioneer produced 1.77 million cars this year, a 4% drop compared to the previous year, and delivered 1.79 million vehicles, a 1% decrease from 2023. This marks the first time Tesla's sales have fallen year-over-year, a significant shift in the company's trajectory.

The decline comes amid increased competition in the EV market and overall softer demand for electric vehicles. Tesla CEO Elon Musk had warned earlier in the year that these factors would impact the company's performance in 2024. Despite a strong fourth quarter, with record deliveries of 495,570 vehicles and energy storage deployments of 11 GWh, the company was unable to overcome the challenges it faced throughout the year.

Tesla's struggles are attributed to its aging lineup of vehicles, which has failed to keep pace with newer, more competitive offerings from other manufacturers. Even the relative popularity of the Cybertruck, which began deliveries late last year, was not enough to lift Tesla's fortunes for the year. The company's stock price fell about 5% on the news, as investors reacted to the disappointing results.

The future of Tesla's business is also uncertain, particularly with the incoming presidency of Donald Trump. Musk and Trump have been known to have a close relationship, but the new administration is likely to eliminate incentives that have made Tesla vehicles more affordable to consumers, including a $7,500 tax credit on new EVs. This could further erode demand for Tesla's products.

Musk has announced plans to release a more affordable Tesla in 2025 and a fully autonomous Cybercab in 2026, but these projects face significant hurdles. Meanwhile, China, Tesla's largest and most important market, continues to pose a threat to the company's success. Tesla is losing market share to domestic manufacturers like BYD, and the company's ability to navigate this challenging environment will be crucial to its future success.

As the EV market continues to evolve, Tesla's struggles serve as a reminder that even the most dominant players can face challenges. The company's ability to adapt to changing market conditions and innovate its products will be key to regaining its footing in the industry.