Tesla became the most valuable automaker in the world promising unmatched sales growth. But in the face of growing EV sales by other automakers, Tesla Wednesday backed off its former bullish sales targets.
Tesla has been cutting prices for more than a year to boost sales in the face of greater competition for electric vehicles made by other automakers. As a result, the company’s 2023 deliveries were up 38% from a year earlier. And while that might sound like a big jump to the layperson, the company previously said it was looking for a 50% annual growth rate when averaged over the course of several years.
Wednesday it warned its “growth rate may be notably lower” in 2024 than it was last year.
The fourth quarter marked the first time that it lost the lead in global EV sales to Chinese automaker BYD.
The company’s 50% growth target had been a key feature driving the stock to become the most valuable automaker on the planet, despite having a fraction of the sales by more established automakers.
The company said its slower growth rate would come as “our teams work on the launch of the next-generation vehicle.” That next-generation vehicle, likely a lower-priced model, has yet to be unveiled by the company and Tesla vehicles frequently face delays before hitting the market.
The company warned that the ramp up of its most recent vehicle, the long-delayed Cybertruck pickup that went into production at the end of 2023, “to be longer than other models given its manufacturing complexity.” CEO Elon Musk said three months ago that it could take more than a year for the Cybertruck to be profitable for the company.
The new growth target came as part of an overall disappointing earnings report. Tesla reported adjusted earning of 71 cents a share, just short of the 74 cents a share forecast by analysts surveyed by Refinitiv, but down 40% from a year earlier.
It was the second straight quarter the the company fell short of earnings forecasts, following a string of better-than-expected earnings reports that had stretched back to the start of 2021.
Revenue in the quarter came in at $25.2 billion, up only 3% from a year earlier despite the bigger rise in deliveries, and a sign of the impact of lower average sales price in the wake of its repeated price cuts. Revenue also came in below forecasts of $25.6 billion. Shares were down 5% in after-hours trading.
For more CNN news and newsletters create an account at CNN.com