Reuters reported, citing estimates from Cox Automotive, that the company’s sales fell nearly 23% to 39,800 vehicles in November.
- Overall U.S. EV sales reportedly fell more than 41% in November and Tesla's market share rose to 56.7% from 43.1%.
- Tesla launched cheaper variants of its best-selling Model Y and Model 3 vehicles in October after $7500 federal tax credit on the purchase of new EVs expired at the end of September.
- According to a Cox spokesperson, there is not enough demand for the Standard variants.
Tesla shares closed down 1% on Thursday following a media report that the company’s sales in the U.S. dropped to a near three-year low in November.
Reuters reported, citing estimates from Cox Automotive, that the company’s sales fell nearly 23% to 39,800 vehicles in November from 51,513 a year earlier, and were the lowest since January 2022. Overall U.S. EV sales fell more than 41% in November and Tesla's market share rose to 56.7% from 43.1%, the report added.
Standard Variants Fail To Prevent Slump
Tesla launched cheaper variants of its best-selling Model Y and Model 3 vehicles in October after $7500 federal tax credit on the purchase of new EVs expired at the end of September. The Standard variant of the Model Y starts at $39,990, or at least $5000 less than its other variants.
Likewise, the Standard Model 3 starts at $36,990, at least $5500 lower than its other variants. The cheaper versions were expected to prevent a deep slide in sales caused by the removal of the tax credit.
"The drop certainly shows there is not enough demand for the Standard variants that were supposed to boost sales after the tax credit expiry," Cox's director of industry insights Stephanie Valdez Streaty told Reuters. "What’s also happening is Standard sales are cannibalizing into sales of Premium versions, especially the Model 3."
Tesla’s Changing Priorities Threaten Sales
Tesla is currently attempting to pivot away from being solely an EV maker to fields such as vehicle autonomy and robotics. Meanwhile, its vehicle deliveries stand at risk of dropping for the second consecutive year in 2025.
Deliveries for the nine months through September-end this year totaled 1.22 million. Tesla must now deliver 568,917 vehicles in the fourth quarter to prevent a year-over-year drop in deliveries. Notably, the company has not yet exceeded 500,000 in quarterly deliveries till date.
The company’s best quarterly delivery numbers was in the third quarter earlier this year when it delivered 497,099 vehicles, marking a year-over-year growth of 7.4%.
Ageing Lineup Aids Demand Slump
The company is also bogged down by an ageing lineup. The last addition to Tesla’s lineup was the Cybertruck, deliveries of which began in November 2023. The Cybertruck, however, failed to bring in delivery numbers, likely due to its high price point.
Tesla CEO Elon Musk said in November during the company’s annual general meeting that the company will start production of its humanoid robot Optimus, the Tesla Semi truck and the two-seater Cybercab meant to be launched solely for robotaxi purposes in 2026. There was no mention of a cheaper model.
"Tesla has a serious challenge on its hands next year when several other automakers are planning to roll out cheaper vehicles that are also full of fun features. So the answer is that Tesla needs a completely new vehicle in its fleet. Period,” Streaty told Reuters.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around TSLA stayed within the ‘bullish’ territory while message volume stayed at ‘normal’ levels.
TSLA stock has gained 11% this year and by about 5% over the past 12 months.
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