Tesla warns of “notably lower” sales growth in 2024

Elon Musk’s Tesla is forecasting a sharp sales slowdown this year, becoming the latest car company to warn of sagging demand.

The electric car company said growth would be “notably lower” than in 2023, when deliveries rose 38%.

The comments confirmed the darker mood that has hit the firm’s shares, sending prices down about 20% since the end of last year.

Tesla slashed prices repeatedly last year in a bid to keep demand up.

The moves helped the firm sell a record 1.8 million cars in 2023, up nearly 40% from 2022.

But revenue grew at about half that pace, slowing precipitously at the end of the year.

In its quarterly update to investors, Tesla said it was not expecting another big wave of expansion until it launches a new model.

The company has been discussing plans for a compact car that would be less expensive than its current Model Y, which starts around £45,000 in the UK.

“Our company is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform,” it said.

Wednesday’s sales slowdown warning comes amid wider signs of weakness in the electric vehicle market, after several years of robust growth.

In the UK, sales of electric vehicles rose last year, but failed to make inroads against traditional cars as a portion of overall sales.

In China, the biggest market for such cars, manufacturers have slashed prices as the economy slows, while in Europe, sales of battery electric cars shrank sharply last month, falling nearly 17% compared with December 2022, according to the European Automobile Manufacturers Association.

In the US, major car companies, including Ford and General Motors, have said they are scaling back production of electric vehicles.

Around 1.1 million battery electric cars sold in the country last year, up nearly 50% over 2022 and more than double 2021, according to the government.

Tesla said in the last three months of 2023, revenue was $25.1bn (£19.7bn), up just 3% compared with the same period in 2022. Its profits were lower than many analysts had expected.

Tesla shares slid more than 2% in after hours trade.