While the annual decline came as a surprise, Tesla at the start of the year had warned observers to temper their expectations for 2024.

NEW YORK

Tesla on Thursday reported its first annual drop in electric vehicle deliveries in more than a decade, capping a year that fell short of even the lowered expectations set by executives.

The company delivered about 1.79 million vehicles in 2024, a slight decrease from 1.81 million in 2023. Although Tesla delivered a record 496,000 vehicles in the fourth quarter, that was less than many Wall Street analysts’ expectations of more than 500,000.

The electric vehicle-maker’s shares sank more than 6 percent on the news.

While the annual decline came as a surprise, Tesla at the start of the year had warned observers to temper their expectations for 2024. Last January, chief executive Elon Musk predicted Tesla would experience a “notably slower growth rate” as the company invested in next-generation vehicles it plans to start building in 2025.

Tesla subsequently reported back-to-back declines in year-over-year sales in the first two quarters. Its electric-vehicle deliveries rebounded in the third quarter, increasing about 6.4 percent from 2023, though still missing analysts’ expectations.

Tesla is on track to launch more affordable electric vehicles in the first half of 2025 and expects 20 to 30 percent vehicle sales growth for the next year, Musk said in the company’s third-quarter earnings call in October.

During that investor call, Musk forecast that Tesla would report growth in annual deliveries in 2024, which would have required the automaker to deliver more than 500,000 vehicles in the fourth quarter.

Despite the decline, Tesla’s annual figure is a “respectable” result because the company’s focus on self-driving technology and affordable electric vehicles sets up a strong 2025, Wedbush analyst Dan Ives wrote Thursday in a note to investors.

Musk’s close relationship with President-elect Donald Trump will help accelerate Tesla’s push into autonomous driving, Ives said. Despite the company’s limited electric vehicle sales growth in 2024, its stock finished the year up more than 60 percent. The majority of that gain came after the presidential election, as Musk emerged as one of Trump’s closest confidants during the transition.

Tesla has said it plans to launch its self-driving robotaxi service in late 2025 — another initiative the Trump administration could expedite by laying out a path to approve and regulate the next generation of robotic vehicles. The cybercab’s launch will be a “golden goose” for the company next year, Ives said.

Thursday’s release of delivery numbers came the day after an explosion destroyed a Cybertruck filled with firework mortars and gas canisters near the entrance of the Trump International Hotel in Las Vegas, killing the driver and injuring seven others.