Tesla Faces Its Toughest Year as Global Deliveries Decline

Elon Musk has devoted much of the year to advancing Tesla’s robotics ambitions and securing shareholder approval for a new compensation package valued at roughly $1 trillion. During this period, however, the core automotive business has weakened. The company is confronting declining sales in the world’s three largest vehicle markets—Europe, China, and the United States. Recent figures from the European Automobile Manufacturers’ Association show a 48.5% drop in Tesla’s October sales compared with the same month last year, contributing to an overall decline of about 30% for 2024 in a region where electric-vehicle sales as a whole have risen by 26%. Analysts at Visible Alpha expect Tesla’s global deliveries to fall 7% this year, following a slight decline in 2024, despite record third-quarter numbers fueled by U.S. consumers rushing to claim an expiring tax credit.

The disappointing European performance indicates that Tesla has yet to recover from the downturn that began late last year, which was exacerbated by criticism surrounding Musk’s public political commentary. Although he has adopted a quieter stance recently, the company’s struggles suggest deeper structural issues. Once the world’s best-selling vehicle in 2023, the Model Y has lost ground as competitors have launched a wide range of updated electric cars, frequently at lower prices. Tesla’s comparatively limited and aging product lineup has become a disadvantage in an increasingly competitive landscape.

Musk previously forecast vehicle sales growth of 20–30% in 2025, but Tesla has since withdrawn its guidance and now ties any future expansion to broader economic trends, progress in autonomous-driving capabilities, and improvements in factory output. The challenges are particularly severe in Europe, where more than a dozen sub-$30,000 electric models are already available, and a surge of Chinese manufacturers is gaining traction with attractive designs and diverse offerings. With only the Model 3 and Model Y serving the mass market, Tesla’s presence appears increasingly constrained, even after introducing a more affordable Model Y variant.

Competition continues to intensify. China’s BYD more than doubled Tesla’s October sales in Europe, and Volkswagen has tripled Tesla’s EV volume in the region so far this year. Similar pressures are emerging in China, where Tesla’s sales through October fell 8.4% amid strong challenges from both established and new domestic brands. In the United States, a temporary sales boost in September reversed sharply the following month. Although reduced EV investment by legacy automakers and lower-priced Tesla models may offer some relief, many analysts argue that a new vehicle is essential to reinvigorate demand. Yet there is little evidence of such a model forthcoming, as Musk prioritizes autonomous technologies and robotics. Notably, his new compensation plan does not rely on significant sales growth; it requires Tesla to average 1.2 million vehicles annually over the next decade—a figure well below the company’s 2024 sales.