The stock market faced a challenging week, with major indexes initially declining but showing signs of recovery by the week’s end. The Nasdaq, in particular, displayed resilience, rebounding from intraday lows on Thursday. Despite an overall downturn, leading stocks outperformed, with several indicating buy signals as the market looks toward 2025.
Market Performance Overview
Despite the challenges, Nvidia emerged as a notable performer, while Tesla encountered difficulties due to weaker-than-expected fourth-quarter deliveries. This marked a significant change in Tesla’s annual performance, raising concerns among investors.
The S&P 500 index struggled to hold its ground, dipping below its 50-day moving average earlier in the week but attempting to reclaim it by Friday. The Nasdaq found support at its 21-day line, suggesting a potential turnaround in the market’s trajectory.
Treasury Yields and Crude Oil Prices
Treasury yields saw a slight retreat from recent highs, indicating a shift in investor sentiment. Meanwhile, crude oil prices rose solidly, reflecting ongoing volatility in the energy sector.
The mixed economic data released during the week presented a complex picture, as President-elect Donald Trump prepared to take office. Business optimism has not yet translated into widespread economic strength, with persistent high interest rates and tariff concerns dampening new activity.
Tesla’s Fourth-Quarter Deliveries
Tesla reported record fourth-quarter deliveries, but the figures fell short of analyst expectations and the company’s own targets for full-year vehicle unit growth. The electric vehicle manufacturer produced 459,445 vehicles in Q4 and delivered 495,570 units globally, bringing its total annual deliveries to 1.789 million, a 38% increase from the previous year.
However, the company’s forecast for “slight” growth in 2024 raised concerns among investors, leading to a sharp decline in Tesla’s stock throughout the week. In contrast, BYD emerged as a strong competitor, selling 1.524 million EVs in the fourth quarter, significantly surpassing Tesla’s global total.
Competitive Landscape in the EV Sector
The competitive landscape in the EV sector is intensifying, with companies like Li Auto, XPeng, Nio, and Zeekr also reporting record sales. Analysts warn that the growing market may face challenges due to fierce competition and overcapacity, potentially leading to price cuts and discounts as manufacturers strive to maintain market share.
BYD solidified its market position with annual sales reaching 4.27 million and a growth rate of 41%. While BYD excelled in fully electric battery vehicles, it narrowly missed surpassing Tesla’s total for the year.
Automotive Sales Trends
General Motors and Ford Motor reported strong new vehicle sales for the fourth quarter, indicating a robust finish to a challenging year. GM’s Q4 sales surged by 21%, significantly outpacing a modest 4% gain for the entire year.
Ford also experienced a 9% increase in Q4 sales, reflecting a positive trend in the automotive sector. Both companies saw substantial growth in their EV sales, with GM’s EV sales skyrocketing by 125% and Ford’s increasing by 38% in 2024.
Shifts in Consumer Demand
This shift underscores the growing consumer demand for electric vehicles, even as traditional fossil-fuel car sales remained relatively flat for Ford. Toyota faced a different scenario, reporting declining U.S. new vehicle sales in Q4 and for the year.
However, its EV sales, primarily consisting of hybrids, surged by 53% in 2024, surpassing the milestone of 1 million units sold. Other automakers, including Hyundai and Honda, also reported significant growth in EV and hybrid sales, contributing to a broader trend in the industry.
Future Projections for Auto Sales
Analysts project that U.S. auto sales will rise above 15.8 million units in 2024, marking the best year since 2019. Expectations for a 3% growth in 2025 further highlight the optimism surrounding the automotive market.
As the automotive landscape evolves, competition among EV manufacturers intensifies, prompting established players and new entrants to adapt their strategies. The ongoing shift towards electric vehicles is reshaping market dynamics, with companies striving to innovate and capture consumer interest in a rapidly changing environment.
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