By Akash Sriram and Abhirup Roy
Dec 30 (Reuters) – Tesla deliveries were expected to fall in the fourth quarter, as the loss of U.S. tax credits and rising global competition sapped demand even as the company rolled out cheaper versions of its best-selling electric vehicles.
The decline would follow plummeting sales in the first two quarters of the year when CEO Elon Musk faced a backlash for his political rhetoric. Third-quarter sales got a boost as buyers rushed to lock in tax credits before they expired in September. Still, Tesla is likely to report its second straight drop in annual deliveries, with this year’s decline steeper.
In October, Tesla launched stripped-down versions of the Model Y SUV and Model 3 compact sedan called Standard. It will face competition from affordable EVs made by Chevrolet and Ford, which are expected to hit the market over the next two years.
Analysts expect Tesla’s sales to recover next year, as the Standard versions, priced about $5,000 below previous base models, help the company defend volumes in Europe and Asia, where Chinese EVs are gaining ground.
The company is expected to report fourth-quarter and annual production and delivery numbers on Friday.
NORTH AMERICA, EUROPE SALES HURT
Investor enthusiasm in Tesla largely rests on Musk’s pivot to expanding robotaxis, producing humanoid robots, and improving self-driving technology in its cars. Still, EV sales generate much of its current revenue.
Tesla is expected to deliver 432,810 vehicles in the December quarter, down about 13% from a year earlier, according to analysts polled by Visible Alpha (VA). Another consensus of 20 analysts compiled by Tesla and released on Monday shows that a sharper drop of 15% to 422,850 vehicles is expected.
Tesla’s full-year deliveries were expected to be 1.65 million vehicles this year, down 7.8% from a year earlier, marking the second consecutive annual decline, according to Visible Alpha’s poll.
The fall will be driven largely by sales in North America and Europe, Deutsche Bank analyst Edison Yu said in a note.
MUSK MAY BE MORE FOCUSED IN 2026
The slowdown in sales has not dampened a rise in the company’s share price. Tesla shares rose over 14% this year, boosting Musk’s wealth. Facing criticism for running a cost-cutting arm of President Donald Trump’s administration, Musk has indicated he will focus on his businesses.
A recent court ruling cleared the way for Musk to reclaim a Tesla pay package that had been voided by a Delaware court. Shareholders in November also approved a new compensation package that could be worth roughly $878 billion over the next 10 years for the world’s richest person.
Delivering 20 million vehicles in total is a key goal for that pay along with other milestones on robotaxi expansion, robot sales and valuation.
(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Sayantani Ghosh and David Gregorio)
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