The Tesla Cybertruck explosion outside the Trump International Hotel in Las Vegas on New Year's Day was followed on Thursday by Tesla's release of its fourth-quarter delivery numbers and a drop in its stock price.
Newsweek reached out via email to Tesla for comment on Thursday morning.
Why It Matters
Authorities are investigating whether the Vegas incident, in which one person was killed and seven others injured, was a terror attack. The news adds to a challenging start to the year for Tesla, as the Cybertruck, launched with much fanfare in late 2023, has struggled to meet investors' high expectations.
The company's disappointing delivery numbers were reflected in the stock's performance, with Tesla shares dropping 5 percent at Thursday's market opening.
Why Is Tesla Stock Down?
Tesla's disappointing sales in 2024, marking its first annual decline in a decade, have raised investor concerns. A combination of missed targets, a slowing market and rising competition drove Tesla's stock down 6.08 percent at Thursday's market close.
In the fourth quarter, Tesla delivered 495,570 vehicles, falling short of its 515,000-unit target. The Cybertruck, launched in late 2023, added fewer than 50,000 units to the year's total—far below expectations. This brought Tesla's full-year deliveries to 1.79 million vehicles, a 1.1 percent drop from the 1.81 million delivered in 2023.
The broader electric vehicle market is also presenting challenges. Higher interest rates and economic uncertainty are pushing consumers toward cheaper hybrids, while traditional automakers are ramping up EV production, increasing competition in key markets like the U.S., Europe and China. Tesla remains the market leader but is under pressure to update its aging product lineup.
Tesla's stock performance has reflected these challenges. After a 29 percent drop in the first quarter—its worst in two years—the stock rallied late in the year, ending 2024 up 63 percent and hitting a record high in mid-December. However, the recent decline has renewed concerns about the company's ability to sustain growth.
Adding to the uncertainty, CEO Elon Musk's involvement in politics has drawn attention. Musk spent $277 million backing President-elect Donald Trump and other Republican candidates, actively campaigning in swing states. He has also been appointed to co-lead the new Department of Government Efficiency, raising questions about how much attention he will be able to devote to Tesla.
Despite these hurdles, Tesla's stock has gained about two-thirds of its value since Election Day, driven by optimism surrounding Musk's political influence. Investors are now watching closely for Tesla's next steps, including plans for more affordable models, to see if the company can regain momentum in an increasingly competitive market.
Musk's Response to Cybertruck Vegas Explosion
Musk responded to the incident in Las Vegas, calling the perpetrators evil and asserting that the vehicle's design limited the damage.
"The evil knuckleheads picked the wrong vehicle for a terrorist attack. Cybertruck actually contained the explosion and directed the blast upwards. Not even the glass doors of the lobby were broken," Musk posted on X (formerly Twitter), which he owns.
In a separate statement, he emphasized that Tesla's telemetry data showed no faults in the vehicle and said the explosion was unrelated to the Cybertruck's functionality.
What People Are Saying
Daniel Ives, a financial analyst at Wedbush Securities, said in a report: "We have never viewed Tesla simply as a car company.... Instead we have always viewed Musk and Tesla as a leading disruptive technology global player."
Sam Fiorani, vice president at industry research group AutoForecast Solutions, told CNBC: "Musk's foray into politics may have pulled his focus away from his core businesses."
What Happens Next
Tesla's performance is closely watched as a bellwether for the global EV industry. He has set an ambitious sales growth target of 20 to 30 percent for 2025, but achieving this will depend heavily on the success of the Cybertruck and the introduction of more affordable models.
Despite Musk's close alliance with Trump, Tesla faces some uncertainty under the new administration. While plans to cut regulations and introduce federal guidelines for autonomous vehicles could support Tesla's robo-taxi ambitions, the potential elimination of federal EV subsidies poses a significant challenge.
The company is scheduled to release its full fourth-quarter financial results after the market closes on January 29.
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