Tesla’s car business isn’t really in the driver’s seat

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Subscribe to enjoy similar stories. Tesla sold fewer cars in 2024 than it did the year before. Yet the company is worth about 53% more now.

Don’t think about it too hard. Car sales aren’t really what the company’s value is based on anymore. The revved-up EV maker appeared to start the new year off on a bum note Thursday, with its stock taking a hit following disappointing vehicle delivery numbers for the fourth quarter.

Tesla said it delivered 495,570 vehicles for the period, which was about 3% shy of the 512,300 deliveries projected by analysts, according to consensus estimates from Visible Alpha. The fourth-quarter results brought Tesla’s deliveries for the full year to 1.79 million, which was down from the 1.81 million vehicles delivered in 2023, and the first annual sales drop the company has ever seen, according to Visible Alpha data. The full-year decline isn’t shocking, given the sharp slump in EV sales industrywide that started early last year.

But it bears reminding, now that Tesla is a $1.2 trillion company worth more than the next 20 largest automakers combined, according to data from S&P Global Market Intelligence. And that is with the stock taking a 6.1% hit on Thursday. Tesla’s share price soared 63% in 2024 even as the auto business that accounts for more than 80% of its annual revenue was experiencing its worst year on record.

Such is the draw of the artificial intelligence narrative—enhanced by the star power of Elon Musk. The Tesla chief executive frequently touts Tesla’s prowess in AI as the company develops self-driving technology and robotics. He also effectively used his platform now called X to tweet his way into the White House by enthusiastically supporting the election of Donald Trump.