Wall Street is currently concerned that, $Tesla (TSLA.US)$ after a decline in sales for the first time in over ten years, the company's growth target this year is also 'hanging by a thread.'

Analysts warn that weak production in the fourth quarter could indicate weak sales in the first quarter of 2025, raising doubts in the market about Tesla's ambition for a 20-30% increase in delivery volume in 2025.

The first annual sales decline since going public.

On Thursday, January 2, Eastern Time, Tesla announced vehicle delivery data for the entire year and the fourth quarter of 2024. The data shows that Tesla produced approximately 1.773 million pure electric vehicles for the entire year of 2024 and delivered about 1.79 million cars, which is lower than the 1.8 million cars delivered in 2023 and also lower than the widely expected 1.8 million cars from analysts, marking the first annual sales decline for Tesla since it went public in 2011.

The data for the fourth quarter is similarly unsatisfactory. In the fourth quarter of 2024, Tesla produced approximately 0.459 million Autos, below the Analyst expectation of 0.505 million Autos, and delivered approximately 0.496 million Autos, setting a new record for quarterly deliveries, but still falling short of the average Analyst expectation of about 0.498 million Autos.

The only highlight comes from the Energy storage Business. In the fourth quarter, Tesla installed 11 GWh of energy storage products, a year-on-year increase of 245%, a quarter-on-quarter increase of 60%, and 15% higher than the consensus.

Regarding the fourth-quarter data, HSBC commented that weak production could imply sluggish sales in the first quarter of 2025, raising market skepticism about Tesla's ambition for a 20-30% delivery increase in 2025.

UBS Group stated that fourth-quarter deliveries exceeding production have led to a decline in Tesla's inventory. The company may have slowed production of the Texas Super Factory Model Y, possibly in preparation for a new low-cost model. The production pace of the Cybertruck may also have been slowed.

The guidance will be key to the end of the month Earnings Reports.

Regarding the upcoming Earnings Reports on January 29, HSBC mentioned that considering the weak fourth-quarter deliveries and production, the company is expected to see a quarter-on-quarter decline in profits (the company already hinted in the third quarter), with full self-driving (FSD) release and regulatory credits still having some room for positive surprises.

HSBC emphasized that investors should focus on Tesla's guidance for 2025—specifically, whether Tesla will reaffirm its annual growth target of 20-30% (which HSBC expects, along with market consensus and third-party data providers, to be below this Indicator).

UBS Group stated that although the market is currently pessimistic about Tesla's sales expectations for 2025 (with UBS Group's growth forecast being only 8%), deliveries in 2025 could still be driven by new models.

Tesla previously stated that it would launch a low-priced model (lower by $5,000/$7,000 than Model 3/Y) and a refreshed Model Y (which may launch first in the USA/China) at the beginning of the year. The low-priced model may help boost deliveries in the USA following the cancellation of the electric vehicle tax credit, but it will dilute profit margins.

Analysts also hold a relatively cautious attitude towards the commercialization prospects of other Tesla projects.

HSBC warns that, despite the exciting prospects of autonomous driving Autos, regulatory approvals and commercialization may not occur until after 2026. The market may also underestimate the capital and operation costs associated with taxi fleets. As for Tesla's Other ideas (FSD, Optimus, AI computing, etc.), the prospects for commercialization are similarly unclear and could take several years.

Editor/rice