As the latest automaker to voice concerns about declining demand, Tesla has predicted a significant slowdown in sales this year.
The manufacturer of Elon Musk’s electric vehicles (EVs) predicted “notably lower” growth than in 2023, when deliveries increased by 38%.
Following the announcement, the company’s shares dropped by nearly 6% during extended trading in New York.
Additionally, Mr. Musk issued a warning, saying that if trade barriers are not implemented, Chinese competitors “will pretty much demolish most other car companies in the world.”
Last year, Tesla frequently slashed prices in an effort to maintain demand.
The company sold 1.8 million cars in 2023, a record amount and a nearly 40% increase over 2022 thanks to the actions.
However, revenue increased at a rate of about half that and then sharply slowed down at the end of the year.
Tesla stated that it does not anticipate experiencing another significant wave of growth until it releases a new model in its quarterly report to investors.
Plans for a smaller vehicle that would be less costly than the company’s current Model Y, which starts at about £45,000 in the UK, have been discussed.
“Our company is currently experiencing two significant growth waves: the first one started with the Model 3/Y platform’s global expansion, and the second one, we believe, will be sparked by the next-generation vehicle platform’s global expansion,” the statement read.
Trade barriers are needed in this fiercely competitive market, as Mr. Musk has called for after China’s BYD passed Tesla.
The sales slowdown warning on Wednesday coincided with broader indications of weakness in the EV market following several years of strong growth.
Although sales of electric vehicles increased in the UK last year, they were unable to overtake traditional cars in terms of overall sales.
The European Automobile Manufacturers Association reports that sales of battery-electric vehicles in Europe decreased significantly last month, falling by almost 17% from December 2022, while manufacturers in China, the largest market for these vehicles, have slashed prices as the economy slows.
Major US automakers Ford and General Motors have announced plans to reduce their production of electric cars.
The government estimates that 1.1 million battery-electric vehicles were sold in the nation last year, more than doubling the number from 2021 and up nearly 50% over 2022.
According to Tesla, its revenue for the final three months of 2023 was $25.1 billion (£19.7 billion), a mere 3% increase over the same period in 2022. Its earnings fell short of what many analysts had predicted.