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Tesla reports a sales decline for the first time in over a decade and everyone is saying the same thing

Home> Vehicles> Car news

Published 12:13 3 Jan 2025 GMT

Tesla reports a sales decline for the first time in over a decade and everyone is saying the same thing

Many think they've figured out why Tesla is only now seeing a decline

Harry Boulton

Harry Boulton

Reality might just have hit for Tesla and Elon Musk, as despite a soaring market cap and keen investor interest the company's actual sales have seen a decline for the first time in over a decade.

Tesla, among other key Elon Musk-owned enterprises, has seen significant value increases following Donald Trump's US election victory in November 2024.

The idea is that Musk's strong financial support and close ties to Trump will see the incoming president relax regulations for areas in which the tech mogul's companies exist, allowing them to further prosper and operate with freedom.

Tesla is perhaps the biggest beneficiary of this, as its stock has risen more than 50% since Trump's victory, but a recent earnings report might just have began the bubble-bursting process.

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Tesla sales have dropped by 1.1% year-on-year despite growth in Q4 2024 (Smith Collection/Gado/Getty Images)
Tesla sales have dropped by 1.1% year-on-year despite growth in Q4 2024 (Smith Collection/Gado/Getty Images)

For the first time since 2011, the electric car company has seen a year-on-year sales decline. 2024 saw 495,570 vehicle sales which amounted to 1,790,000 deliveries across the entire year, yet that was 1.1% below the 1,810,000 that 2023 managed.

This is despite a sales growth in Q4, which saw purchases rise by around 2.3% due to a number of incentives, as reported by AP, but it wasn't enough to recover from an early-year slump.

Many on social media are in agreement regarding the reason behind this sales dip, and it's supposedly to do with the CEO's actions in the past year.

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Comments underneath a post on the r/technology subreddit appear to indicate that Musk's increasingly heavy involvement in politics - both within the US and worldwide - have damaged the Tesla brand, especially within what many believe to be his most common consumer base.

"Musk broke the biggest rule in capitalism," explains the top comment: "Never take a side and stay in the background."

It's certainly not bad advice when you're trying to sell something, as if your image starts to have perceived negative associations then it'll be hard for many to separate your companies from your actions.

"I find it interesting how he is alienating his biggest potential customer base," explains another commenter, "I really don't hear MAGA singing the praises of EVs. In fact, they avoid EVs like the plague."

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While there will certainly be a big proportion of Tesla buyers that are keen fans of Musk and his recent political leanings, it's also not hard to understand why many within Musk and Trump's camp would favor the 'traditional' gasoline-heavy trucks over their battery-powered counterparts.

Many believe that Musk's association with Trump has damaged Tesla sales (Anna Moneymaker/Getty Images)
Many believe that Musk's association with Trump has damaged Tesla sales (Anna Moneymaker/Getty Images)

One user even goes as far to state that "when I see Teslas on the road now, I tend to feel slightly disgusted. Not with the driver, just the car."

While some can justifiably argue that a 1.1% decline in sales isn't too much to worry about - especially as it's the first year-on-year drop in a long time - it does perhaps cause some worry when it comes to investment in the company.

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Much of Tesla's current market cap is based on the potential rapid growth of the business, and if this is looking to be an unrealistic expectation then you might see the stock start to fall.

Tesla's market cap is significantly higher than other manufactures that sell at far greater volumes and, as one commenter explains, the news that sales might not be in line with expectations "challenges that growth narrative" significantly.

Stock prices for the company have dropped around 6% in the last day and 18.5% over the past five days, but overall it still shows a significant increase of 59% over the past 12 months.

Featured Image Credit: SOPA Images / Contributor / Smith Collection/Gado / Contributor / Getty
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