Tesla's 2024 Delivery Goals and Challenges

By Abhirup Roy

SAN FRANCISCO (Reuters) – Tesla (NASDAQ:TSLA) is targeting modest growth in 2024 vehicle deliveries amid attractive incentives for its electric vehicles (EVs). However, the company’s success significantly depends on the performance of the new Cybertruck pickup, which analysts indicate may be struggling.

After years of rapid expansion, Tesla achieved a record delivery of 1.81 million vehicles in 2023. Nonetheless, increasing competition and an aging vehicle lineup impact the market leader as consumers opt for more affordable hybrid vehicles amidst rising borrowing costs.

CEO Elon Musk anticipates that a future in robotaxi services will enhance Tesla’s market position, particularly with expected regulatory support from President-elect Donald Trump. Yet, analysts warn that this technology is likely several years away. Musk's forecast of a 20-30% increase in sales this year relies on introducing a cheaper model and the successful launch of the Cybertruck.

Concerns have been raised about the Cybertruck’s pricing and unconventional design, which may deter conservative truck buyers, according to AutoForecast Solutions Vice President Sam Fiorani.

To boost demand, Tesla previously reduced vehicle prices, igniting a competitive price war within the industry. In the current year, the company has leaned heavily on attractive incentives, such as low financing for Model 3 sedans and Model Y SUVs, as well as promoting low lease options.

In addition, Tesla offered three months of free fast-charging and access to its Full Self-Driving software for new orders expected to deliver by December 31.

Despite these efforts, S&P Global Mobility data indicates that Tesla's U.S. vehicle registrations plummeted nearly 7% year-over-year to about 500,000 vehicles by the end of October, largely driven by a 32% decrease in Model 3 and a 24% decrease in Model S registrations.

While Tesla has not disclosed specific Cybertruck sales data, S&P reported that U.S. registrations for the truck decreased to 4,335 in September from 5,428 in August, eventually totaling 31,451 through October. Analysts anticipate reaching 50,000 registrations by year-end.

Musk originally projected a $40,000 price for the Cybertruck when it was announced in 2019, attracting 1 million reservations. However, the launch versions reached prices of up to $120,000. Currently, available models include the Cyberbeast at nearly $100,000 and an all-wheel-drive variant around $75,000.

Tesla ceased taking reservations while allowing direct orders, and some Cybertrucks are reportedly in inventory for immediate delivery—these actions suggest potential demand issues.

The Cybertruck, which began leasing at $999 monthly and was later adjusted to $899, reflects indications of softening demand, according to S&P's Libby.

Monitoring the Cybertruck’s demand and supply is critical for Tesla investors, as Musk has significantly invested in its development and warned of potential production and cash flow challenges.

Furthermore, used Cybertrucks are reportedly lingering on dealerships, with time on the market increasing from an average of 27 days in May to approximately 75 days.

Kevin Roberts, CarGurus' director of economic and market intelligence, highlighted the declining price and rising time on the market for used Cybertrucks as concerning.

Tesla has not offered any comments regarding these trends.